HomeMy WebLinkAbout620-R GriffinRe: 85- 090 -C, 85 -091 -C
Dear Mr. Griffin:
A. Findings:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Mr. William Griffin
c/o Frank J. Tamulonis, Jr., Esquire
Zimmerman, Lieberman & Derenzo
111 East Market Street
P.O. Box 238
Pottsville, PA 17901
ORDER NO. 620 -R
DATE DECIDED: August 18, 1988
DATE MAILED: September 13, 1988
The Ethics Commission has reviewed the allegation(s) that you
have violated the Ethics Act, Act 170 of 1978. The nature of the
alleged violation(s) is as follows:
I. Allegation: That you, a Township Supervisor in West Mahanoy
Township,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 other
than compensation allowed by law, because the township is currently
paying for your annuity program and group life and hospitalization
insurance.
1. You served as a West Mahanoy Township Supervisor from January,
1974 until the present.
2. Minutes of West Mahanoy township Supervisors' reorganization
meetings disclose that from 1974 through 1985, you were appointed
roadmaster.
a. Prior to December, 1985, you served as part -time roadmaster
but received no salary. You worked on an as needed basis.
b. At the December 5, 1985 meeting, motion made by Letcavage,
second by Yanchulis to employ you as a full -time roadmaster.
You abstained from voting.
Mr. William C:riffin
Page 2
c. At that same meeting, Supervisor Letcavage was appointed
group leader of the road crew and Supervisor Yanchulis was
appointed as township treasurer.
3. Records of the West Mahanoy Township Auditors disclose that a
special meeting was held on November 18, 1985.
a. The purpose of the meeting was to establish salaries for
township supervisors employed full -time.
b. * Salaries were approved retroactive to October 16, 1985:
William Griffin, Roadmaster, not to exceed $2,400 /year.
John Letcavage, Group Leader, at a rate not to exceed
$5.90 /hour.
c. The minutes note these positions were a- roved by the
supervisors at a prior meeting.
4. West Mahanoy Township payroll records disclos:2d that you received
compensation as roadmaster at the rate of $100.00 b?- monthly effective
October 16, 1985. The first pay was October 31, 1985.
a. You were paid $500.00 in 1985.
5. You were enrolled in a retirement program as a township
supervisor.
6. Records relating to this program indicate as follows:
a. The original program was obtained thrc:?:.-, 'Cr.: Baltimore
Life Insurance Company.
b. Your Policy No. was A0593747.
c. Coverage was thereafter with Life of Maryland Incorporated.
d. Your new policy No. was 1010016610.
a. This change occurred in November, of 1982.
7. Baltimore Life Insurance Company and Life of Maryland
Incorporated, premium statements indicated semi - annual billings for
the above policy as follows.
Statement Date Amount From
06 -14 -85 $300.00 Life of Maryland
11- -85 $300.00 Life of Maryland
Mr. William Griffin
Page 3
06 -13 -86 $300.00 Life of Maryland
12 -12 -86 $300.00 Life of Maryland
8. Township records indicate the following in relation to payments by
the township for the above benefit:
Check
Date Number Company
06 -12 -85 6705 Life of
Maryland
12 -05 -85 7169 Life of
Maryland
06 -11 -86 7591 Life of _
Maryland
12 -17 -86 8005 Life of
Maryland
Coverage Amount
Annuity
Annuity
Annuity
Annuity
$1,500.00
$1,500.00
$1,200.00
$1,500.00
*These payments represent premiums for several township
officials and employees including you.
9. The policy was terminated in June, 1987, and you have received
benefits in the amount of $13,210.62.
10. You were enrolled in a life insurance program at the township's
expense.
11. This insurance was with the Trustee's Insurance Fund and
sponsored by the Pennsylvania State Association of Township
Supervisors.
a. The policy was effective (for you) on March 1, 1974.
b. Policy No. 53 -14 -8.
12. Premium statements from the Trustee Insurance Fund to West
Mahanoy Township indicate the following billings for your life
insurance coverage from March, 1985:
Statement Date Amount
07- -85 $66.95
08- -86 $66.95
Mr. William Griffin
Page 4
13. Records of West Mahanoy Township indicate the following
regarding the township payment of the above premiums for your life
insurance coverage.
Date Check No. Payee Coverage Amount
08 -29 -85 6882 Trustees Life $401.70
Insurance
Fund
08 -27 -86 7766 Trustees Life $751.80
Insurance
Fund
*Payment represents premiums for several township officials and
employees including you.
1e:. You were enrolled in a hospitalization and medical program at the
township's expense.
15. This insurance was obtained through the TrustL's Insurance Fund
as identified in Finding No. 13 above. The policy was effective on
November 1, 1976. Your policy No. was 041843. This policy was
changed to medical supplemental in 1980 and the policy number charged
to 43411.
16. Premium statements from Trustee's Insurance Fund to West Mahanoy
Township indicate the following billings for your
ho?italization /medical insurance coverage from March 31, 1985:
Statement Date Amount
09 -16 -85 $ 65.00
09 -19 -86 $ 73.00
08 -15 -86 $227.40
17. Records of West Mahanoy Township indicate the following
regarding the township's payment of your hospitalization /medical
insurance coverage.
Date Check No. Payee Coverage Amount
10 -08 -85 7008 Trustee's Hospital $1,542.30
Insurance + Surgical
Fund
Mr. William Griffin
Page 5
11 -10 -86 7901
Trustee's
Insurance
Fund
Hospital $3,184.00
Surgical
*Payments represent premiums for several township officials and
employees including you.
18. A review of the above indicates that from March 31, 1985 to the
present West Mahanoy Township expended the following for your various
benefits:
Annuity: $1,200.00 (Cash surrender $13,210.62)
Life Insurance: $ 133.90
Hospitalization: $ 365.40
19. A review of minutes of the meeting of the township board of
auditors from 1976 through January, 1987, do not indicate that any
life, medical or pension coverages_were fixed or renewed for township
supervisors employed by the township.
a. Auditor minutes prior to 1976 could not be located and have
been missing for many years.
20. Minutes of the township board of supervisors from January, 1979,
to December, 1986, indicate as follows:
a. January 3, 1984 - Minutes reflect a paragraph that all
policies and procedures previously in effect will continue.
b. January 7, 1985 - Minutes reflect a paragraph that
unanimous approval by the Board of Supervisors was given to
continue all past policies and procedures that are currently
in effect.
c. Both of these recordings were made at reorganization
meetings.
d. Minutes from January, 1979 through December, 1986 do not
reflect that any life, medical or pension coverages were
specifically fixed or renewed for township supervisors
employed by the township.
e. The township secretary /manager advised that the township
supervisors wanted the paragraphs mentioneed in a and b
above to include being a reference to the township's life,
medical and pension programs.
21. By letter dated May 23, 1985, over signature of Leonard J.
Tragus, Township Secretary /Manager, to Peter Sarno, Jr., it is
Mr. William Griffin
Page 6
verified that township supervisors are enrolled in life .:.d health
insurance programs and are also enrolled in a retirement program.
22. Michael Kovalich served as a West Mahanoy Township auditor from
1966.
a. Mr. Kovalich indicated that the township auditors approved
the annuity, life and medical plans for supervisors in 1971,
b. ,Yovalich could not provide auditor's minutes prior to
January, 1976.
:ovalich advised that former auditor Anthony Domarotsky was
the last person to have the auditor's minutes prior to
January, 1976 in his possession.
d. Review of township supervisor minutes for 1971 and 197E
disclosed no mention of any alleged controversy at tot r :'p
meetings over the life, medical and annuity coverages
affcrded the supervisors.
23. Anthony Domarotsky served as a township auditor from 1970 to
1976.
a. He indicated that the auditors did nothing other than the
annual audit.
b. Domarotsky stated that he never voted on any motion to give
auditor's approval for insurance benefits to the township
supervisors.
You provided the following information in relati^ to the
stant situation.
a. You are a "non- salaried" township supervisor and
roadmaster.
b. You are entitled to a salary but never accepted one.
c. The township pays for your medical, life and annuity
insurance.
f. You voluntarily terminated your township pension plan in
June, 1987.
d. These programs were in place in 1974 when you took office.
e. The auditors questioned this coverage in 1971 and 1976 and
resolved all problems at that time.
Mr. William Griffin
Page 7
g.
You received $13,210.62 from this plan and kept it for your
personal use.
h. You believed that the insurance benefits you received were a
form of payment for work you did prior to accepting a salary
in December, 1985.
i. You agree with the amounts paid by the township as listed in
Finding No. 18.
B. Discussion: As a Township Supervisor you are a public official as
that term is defined in the State Ethics Act. 65 P.S. 402. As such,
you are subject to the provisions of the Ethics Act and the
restrictions therein are applicable to you.
Generally the Ethics Act provides that:
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 question of the propriety of pension and annuity plans or
insurance benefits for supervisors of second class townships have been
reviewed by this Commission on many occasions. McCutcheon. No. 127,
Hoak, No. 128, Marcello, 85 -003. The Commission determinations in
these matters have been reviewed and affirmed by the Commonwealth
Court of Pennsylvania. McCutcheon v. State Ethics Commission, 77 Pa.
Commw. Ct. 529, 466 A.2d 283, (1982).
Generally, in situations such as the instant matter, it must be
determined whether the official used his position to obtain or secure
financial gain other than the compensation that is authorized by law.
It is now clear that pension or annuity benefits or insurance
benefits such as the type herein question, constitute a financial
gain. See McCutcheon v. State Ethics Commission, 466 A.2d 283, at
288.
The additional question to be answered is, therefore, whether
such benefits are compensation provided by law. A complete analysis
of this exact issue has been set forth in the above authorities. See
also Hendricks v. East Rockhill Township, 1 D & C 3d 763, (1977).
Generally, the compensation to be paid to a townshlp supervisor who
serves only in that position is specifically set by statute. 53 P.S.
ivy. fl.liam Griffis,.
Page :3
65515. A Supervisor who is also employed by the tow, ,ship in one of
the positions authorized in the Second Class Township Code, may
receive additional compensation. Such compensation, however, in order
to be authorized by law, must be affirmatively fixed by the Township
Board of Auditors. 53 P.S. 65542.
Similarly, this Commission has also ruled in accordance with the
above, that a non - working township supervisor may not receive health,
medical and life or other insurance benefits without violating the
F%cvisions of the State Ethics Act. Krane, No. 84 -001, Glova, No.
:6.
7 idditionally, even if such a supervisor is employed by the
Dwnship as a superintendent, secretary /treasurer, roadmaster, or
:aborer in accordance with the Second Class Township Code, such
1enefits are considered compensation and must, therefore, be fixed as
such by the township board of auditors. See Synoski v. Hazle
Township, Pa. Commw. 168, 500 A.2d 1282, (1985); In re: Appeal of
the Auditors Report of Muncy Creek Township, Pa. Commw. Ct.
520 A.2d 1241, (1987), Hunt, No. 348 -R.
The foregoing principle was recently reaffirmed by Pennsylv`:
Commonwealth Court in Yocabet v. State Ethics Commission, Pa.
Commw. Ct. , 531 A.2d 536 (1987). In the cited case, the Court
held inter alia that a township supervisor violated Section :LE) of
the Ethics Act when he received a salary for the position of
secretary /treasurer which had not been set by the auditors. The
Court, in affirming the Order of the Ethics Commission which required
a restitution of the financial gain, noted on page 539 of its Opinion.
"Section 7 of the Ethics Act instructs the
Commission to investigate situations where there
is a reasonable belief that financial conflict may
exist, and if conflict is found, to require the
offender to remove himself from the conflict
without gain."
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, supra, Conrad v.
Exeter Township, 27 D & C 3d 253, (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 or South Union
Township, 47 Pa. Commw. 1, 407 A.2d 906, (1979).
In this case, you were a supervisor from January, 1984 to the
present and you were annually appointed roadmaster.
As to the period from October, 1985, forward, you received
payments of $200 a month as roadmaster in addition to the annuity,
group life and hospitalization insurance benefits. Although you have
Mr. William Griffin
Page 9
stated that you believed the foregoing benefits were your compensation
from January, 1974 through October, 1985, you would not be entitled to
the above benefits or any other salary because of the absence of the
requisite auditor approval. The minutes of the meetings of township
auditors from 1976 through January, 1987, reflect that there was
neither a review nor approval of these types of benefits or any other
form of compensation. Indeed, you first received compensation in
October, 1985. The auditors, however, did not even approve or fix
this compensation until November, 1985. Parenthetically, there are
contradicting statements from two auditors concerning whether there
was auditor approval for these benefits in 1971. However, it is noted
in this regard that the auditor's minutes are unavailable for the
period prior to January, 1976. Since it appears that auditor approval
was never given for these benefits, you were not entitled to the
receipt of same at the township's expense.
You, as a public official, violated Section 3(a) of the Ethics
Act in that you have obtained a financial gain through the receipt of
the benefits which is not compensation as provided for by law.
It also should be noted that even if these benefits had been
received in good faith, such would not be controlling. Good faith
receipt of such benefits, even when based upon a solicitor's advice,
will not alleviate the necessity of a public official reimbursing his
governmental body for the receipt of a financial gain to which he was
not entitled. See Allegheny County v. Grier, 179 Pa. 639, 36 A. 353,
(1897): McCutcheon v. State Ethics Commission, supra; Kestler Appeal,
66 Pa. Commw. 1, 444 A.2d 761, (1982). As a result, this Commission
believes that you must reimburse the 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) 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 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).
Mr. William Griffin
Page 12
d. You son is about 34 years of age. He has worked for the
ownship Streets Department for about 11 years.
e. re resides at the residence of you and your spouse.
Minutes of the township board of supervisors meetings indicate
follows:
a .
April 14, 1982 - "Due to the increased demand for an
additional street department vehicle for road maintenance, a
motion was made and seconded to rent an all- purpose 4 -wheel
drive pick up truck. Abstaining from voting was roadmaster
William Griffin, Sr.
b. The minutes
supervisors
increase of
do not reflect any discussion by the
regarding the cost of recital and subsequent
this amount.
c. The minutes do not indicate that the township will be
renting your truck, or the cost of this rental.
23. The township general fund expenditures ledger and supervisors'
meeting minutes indicate the following regarding the rental of your
i ruck .
Date Payee Check No. Amount
04 -16 -82 William Griffin, Jr. 4317 $ 50.00
05-12-82 William Griffin, Jr. 4331 $ 50.00
6 -23 -82 William Griffin, Jr. 4433 $ 50.00
:'7 -14 -82 William Griffin, Sr. 4450 $ 50.00
58- -11 -82 William Griffin, Sr. 4506 $ 50.00
09 -08 -82 William Griffin, Sr. 4565 $ 50.00
10 -15 -82 William Griffin, Sr. 4626 $ 50.00
11- -10 -82 William Griffin, Sr. 4692 $ 50.00
12 -08 -82 William Griffin, Sr. 4756 $ 50.00
1982 Total: $450.00
as
Mr. William Griffin
Page 13
01 -03 -83 William Griffin, Sr. 4792 $ 50.00
01 -31 -83 William Griffin, Sr. 4854 $ 50.00
03 -09 -83 William Griffin, Sr. 4916 $ 50.00
04 -13 -83 William Griffin, Sr. 4949 $ 50.00
05 -11 -83 William Griffin, Sr. 5036 $ 50.00
05 -28 -83 William Griffin, Sr. 5104 $ 50.00
06 -08 -83 William Griffin, Sr. 5113 $100.00
07 -13 -83 William Griffin, Sr. 5182 $100.00
08 -10 -83 William Griffin, Sr. 4756 $100.00
09 -14 -83 William Griffin, Sr. 5318 $100.00
10 -12 -83 William Griffin, Sr. 5381 $100.00
11 -09 -83 William Griffin, Sr. 5445 $100.00
12 -14 -83 William Griffin, Sr. 5504 $100.00
1983 Total: $1000.00
01 -11 -84 William Griffin, Sr. 5569 $100.00
02 -08 -84 William Griffin, Sr. 5639 $100.00
03 -14 -84 William Griffin, Sr. 5704 $100.00
04 -11 -84 William Griffin, Sr. 5753 $100.00
05 -09 -84 William Griffin, Sr. 5828 $100.00
06 -13 -84 William Griffin, Sr. 5896 $100.00
07 -11 -84 William Griffin, Sr. 5956 $100.00
08 -08 -84 William Griffin, Sr. 6029 $100.00
09 -04 -84 William Griffin, Sr. 6093 $100.00
10 -10 -84 William Griffin, Sr. 6142 $100.00
Mr. Wil:.iam Griffin
Page 14
1x -14 -84 William Griffin, Sr. 6227 $100.00
12 -11 -84 William Griffin, Sr. 6299 $100.00
1984 Total: $1,200.00
01 -07 -85 William Griffin, Sr. 6357 $100.00
01 -15 -85 William Griffin, Sr. 6442 $100.00
03 -13 -85 William Griffin, Sr. 6495 $100.00
04-10 -85 William Griffin, Sr. 6551 $100.00
05- 03 -85 William Griffin, Sr. 6618 $100.
06- -85 William Griffin, Sr. 6717 $100.00
07- -85 William Griffin, Sr. 6774 $100.00
1985 Total: $700.00
29. You provided the following information in relation to the r' ?ntal
of your truck by the township.
a. Your truck was initially used when one township truck broke
down during an emergency. Your truck was used to L low s;.iow
and service narrow streets and roads in the township.
b. Your truck was thereafter used on occasions of a simile.
nature when needed.
•
Two township supervisors voted to pay you for the L:ontinued
use of your truck and to provide gas when the truck was used
on township business.
d. You abstained from this decision.
e. In January of 1984, two supervisors voted to increase the
rental fee from $50.00 to $100.00 per month.
f. No open and public process was used by the township
regarding this rental.
g
There was no formal contract or rental equipment executed
regarding this situation.
Mr. William Griffin
Page 15
h. You deny receiving any personal financial gain from this
arrangement because you purchased the truck and paid all
maintenance costs.
i. You related that the two supervisors informally discussed
the unfairness of using your truck without reimbursement and
decided to rectify the situation.
You have not received any reimbursement for the use of your
truck since July, 1985, but still make it available for
- township use when needed.
k. In certain instances, the use of your truck saves the
township the expense of using a large truck.
1. You stated that in 1983, you paid a repair bill of $700.00
on this truck when its clutch was burned out while pulling
another township truck out of a snowdrift.
B. Discussion: As previously noted above, you are a public official
subject to the provisions of the Ethics Act.
Section 3. Restricted activities.
(c) No public official or public employee or a
member of his immediate family or an'y business in
which the person or a member of the person's
immediate family is a director, officer, owner or
holder of stock exceeding 5% of the equity at fair
market value of the business shall enter into any
contract valued at $500 or more with a
governmental body unless the contract has been
awarded through an open and public process,
including prior public notice and subsequent
public disclosure of all proposals considered and
contracts awarded. Any contract made in violation
of this subsection shall be voidable by a court of
competent jurisdiction if the suit is commenced
within 90 days of making of the contract. 65 P.S.
403(c).
Section 3(c) basically provides that no public official
shall enter into a contract valued at $500 or more with his
governmental body unless the contract was awarded through an open and
public process. In the instant case, you, as township supervisor,
negotiated a contract with the township for the rental of your truck
which was in excess of $500. The minutes of the township board of
supervisors reflect that a motion was made and seconded for the rental
of your truck. You did not participate in that vote which carried the
motion. However, you were awarded this contract without a public and
j
Mr_. William Griffin
Page 16
open process. There wa no advertisement for bids on a truck rental
and hence there was no possibility of competition. This contract,
which resulted in ayments to you totalling $3,350.00 over a three year
period, was in excess of $500 and was not made in an open and pub1 =_c
bidding process. This clearly violates Section 3(c) of the Ethics
Lot. See Donati, No. 204, wherein this Comm ssion found a violation
of Section 3(c) of the Lthics Act in a situation where a school
director s spouse contracted with the school district in an amount
over $500 where there was not an open and public process. See also
Mart all, No. 528 and Gerhart, No. 530.
C. Conclusion and Order.
1. Zs a Township Supervisor in West Mahanoy Township, you are a
"public official" and, as such, are subject to the
provisions of the Ethics Act.
Section 3(a) of the Ethics Act is implicated when you
received a gain through public office consisting of anmity,
group life and hospitalization insurance at the township's
expense for the period between January, 197'. and March 31,
1985., however, since Act 41 of 1988 provides amnesty as to
the receipt of those benefits, no penalty or assessment may
be charged for the receipt of the benefits during that
pe :_iod.
3. You violated Section 3(a) of the Ethics Act when you
received annuity, group life insurance and hospitalization
benefits at the township's expense for the period April 1,
1985 forward in that such gain is not compensation provided
for by law.
4. The financial gain which you received and which was not part
of the compensation provided for by law amounts to
$1,699.30.
5. You violated Section 3(c) of the Ethics Act when ' ►ou
contracted with the township for the rental of your truck
because the contract was in excess of $500 and was not
awarded through an open and public process.
6. You are hereby ordered to remit to the State Ethics
Commission, within thirty (30) days of the date of this
order, the amount of $1,699.30 made payable to West Mahanoy
Township as restitution for the financial gain that you
received.
7. Failure to comply with the provisions of this order will
result in a referral of this matter to the appropriate law
Mr. William Griffin
Page 17
enforcement authority with a recommendation that
both civil and criminal proceedings be instituted.
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 5
business days after service (defined as mailing).
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). The confidentiality Provision does not restrict
respondent's consultation with legal counsel.
By the Commission,
c-44Th
Joseph W. Marshall, III
Chairman