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HomeMy WebLinkAbout656 LaughllinMr.=Raymond Laughlin Benezette, PA 15821 Re: 86 -084 -C Dear Mr. Laughlin: A. Findings: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Order No. 656 Date Decided: June 10, 1988 Date Mailed: June 24, 1988 • 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 Benezette Township Supervisor, 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 payment from township funds for medical insurance /life insurance plans in which you participated. 1. You served as a Benezette Township Supervisor, for approximately twelve years until the end of December, 1986 when your term of office expired. 2. Records of Benezette Township and the Columbia Insurance Company disclose that the Benezette Township Supervisors received health insurance coverage through Columbia. a. An application and adoption agreement was executed on April 8, 1975 and signed by Frank Gigliotti, agent for Columbia and Jean Tuttle, Benezette Township Secretary - Treasurer. 3. Columbia Insurance Company records confirm that you were insured as follows: a. Policy No.: AKSM -3019 Effective date: August 22, 1978 Coverage: Disability income benefits, employee OPH Plan - E $100 /week, accident and sick plus dependent coverage, AOR. b. Policy No Ef f ectivJ Coverage: c. Policy No .sf f ectve Coverare: d. policy No E' f ective • Coverage: . : AKM2- ')534 date: December 15, 1986 Major Medical - Hospitalization . : KMC -3019 date: August 22, 1978 Cancer . : LXSM -3920 date: August 22, 1978 Life Flan F $10,000.00 plus accidentl death and dismemberment. e. Columbia representatives informed that AKME coverage included basic major medical coverage, the AKSM included outpatient medical coverage, weekly disability benefits and a supplemental accident disability. 1. Columbia Insurance Company records disclosed the following changes to township coverages: a. 12- 12 -80: Memo to Rosemary from Frank Gigliotti noting addition to coverage: Raymond Laughlin, cancer coverage fami" v, $35.40. • Robin Roberts, family Plan B, $138.84 Robert Larkin, cancer, $4.14. William Woodring, cancer, $30.73. New business turn -in form 7A identifying upgrade in policies. b. Undated, handwritten policy change sheet noting change in hospitalization coverage type from KSM to KME: Raymond Laughlin - December 15, 1980 - $1,616.39. Robert Larkin - December 15, 1980 - $552.69. William Woodring - December 15, 1980 - c. January 20, 1981 - Transfer hospitalization form KSM to KME (upgrade). Premium costs: Laughlin $1,616.39. Mr. Raymond Laughlin Page 3 Larkin $522.69. Woodring $1,207.89. Additional upgrade - Raymond Laughlin A/H 83.40 KSM -3019 Credit $16.68 Total: $66.72 d. December 7, 1982 - Memo from Frank Gigliotti to Rosemary Huber upgrading benefits effective November 15, 1982. Add $50.00 /weekly benefit, $9,000 life insurance and a death and disability benefit. New Business Turn -in form 7A, upgrade costs: $50.00 weekly disability. Laughlin $58.32. Woodring $33.04. Life Insurance: Laughlin: $24.95. Woodring: $24.95. 5. Columbia Records disclose that premium payments were made on your behalf by Benezette township as follows: a. December 20, 1980: Upgrade Cancer coverage family $35.40. b. Updated, handwritten policy change sheet noting charges in coverage for hospitalization from KSM to KME. Effective date of coverage 12- 15 -80, premium cost of $1,616.39. c. 1981: Invoice for transfer of hospitalization from KSM to KME: AKME: $1,616.39 d. 1982: Invoice dated 1/19/82, due to 3/15/82. Policy No. AKME 0534 - $1,885.86 - Accident AKSM 3019 - 234.68 - Health LKSM 3019 - 17.16 - Life Total - $2,137.64 . /It ge 4 �. Weekly disability: :Laughlin $24.95 Woodring $24.95 t. 1983: Invoice dated 1/19/83, due date 3/15/83. g. _...•��. .:11...6 In•ccice dated f /;: /;; : due 8/15/82, r_ ic check No. 1830: KMC 3019 - $67.00 12 -7 -82: Kemp from Frank Gigliotti to Rosemary ':tier'_ Columbia) upgrading benefits effective 51-15-02. t50.O0 weekly disability benefit added, $5,0 ^0 added to life insurance. New business turn -in form identified cost for only Laughlin anc:. Woodring as: Life insurance: AKME 0534 AKSM 3019 LKSM 3019 Invoice dated 6/20/83, due 8/15/83 AKMC 3019 $77.05 Invoice dated 1/6/84, due 3/15/84. AKME 0534 $1,920.82 AKSM 3019 418.61 $2,339.43 Life insurance coverage deleted LKSM h. 1985: Invoice of 3/1/85, due 3/15/85. Second notice AKME 0534 AKSM 3019 $1,670.28 242.21 251.16 $2,163.65 $1,920.82 418.61 $2,339.43 Laughlin $58.32 Woodring $33.04 by for coverage from 3/15/85, due 3/15/86. i 1986: Invoice date 2/28/86, due 3/15/86. Handwritten on invoice was, the auditor's for i3enezette Township did not approve hospitalization. Therefore, this policy will not be renewed. Note signed Janice Wilson, secretary. Mr. Raymond Laughlin Page 5 this policy will not be renewed. Note signed Janice Wilson, secretary. 6. Your coverage was terminated on December 31, 1986 due to your term of office expiring. Columbia records confirm that refunds were made to the township as follows: a. AKME 0534 - $368.20 — Check #10810 b. AKSM 3019 - 83.32 - Check #10810 $456.52 7. _ riinutes of the Benezette Township Supervisors disclosed the following in regards to questions raised about the supervisors receipt of insurance benefits: a. March 5, 1984, Page 124: Citizens present to discuss insurance for supervisors. Major concerns expressed at costs of $6,767.47, which is more than half real estate taxes. Letter from Solicitor Richard Masson read stating that nothing illegal in current coverage. Auditors stated PSATS, Marion Nailor, was contacted, who stated insurance is not illegal but may be unethical. Auditor Chairperson Pauline Pansi asked why the supervisors did not present policies when asked to do so;; Following decision reached by the supervisors, all benefits carried for the secretary /treasurer will be dropped (volunteered by the secretary /treasurer) amounting to $1,249.35. Supervisors also will drop coverage for supervisors' life insurance ($381.12) and cancer insurance ($207.). Total decrease of $1,737.47. Supervisors state they will not drop any of their health or accident coverage. b. April 2, 1984, Page 127: Old Business. Citizens present to ask what decisions were made concerning supervisors' benefits. Supervisors report that as read in the minutes coverage in the amount of $1,737.47 were dropped. No further reductions will be made at this time. PSATS newsletter of March 5, 1984, which discusses State Ethics Commission rulings was read. Mr. Raya<ord ughlin Iage c. 6, 1984, Page 134: 1,3ported that tie cancel p 1icy from Columbia Insurance due, policy to oxpire August :5, 1984. Supervisors to consider paying frr policy. Letter from PSATS read regarding Senate Bill 1385, insurance and benefits for supervisors. Secretary to notify Representative William Wachob giving the township's support. d. March 4, 1985, Page 142: Reported that Solicitor Richard Masson has all the information from the State Ethics Commission concerning the supervisors' insurance benefits. Masson requested a copy of the township auditors' letter tc the supervisors. - e. May 6, 1985, Page 145: Resident James McCluskey questions what insurance policies renewed for 1985. Information given that hospitalization and accident policies for supervisors were renewed, life insurance was discontinued. Resident James Wonderly states Supervisor William Woodring has coverage at place of employment. Woodring responds that he is covered only after working a certain number of hours, township insurance covers supervisors on or off the job. July 1, 1985, Page 150: Supervisors report that they are looking in to the legalities of supervisors hospitalization. g. August 8, 1985, Page 153: PSATS letter to Auditor Hazel Campbell and Campbell reply read. Resident Kim Roberts questions how the township supervisors could approve payment of the 1985 hospitalization without auditor approval as was stated in the PSATS letter. Supervisors state that the vote of the auditors on this subject was (1) auditor in favor, (1) auditor opposed. Discussion followed. h. September 3, 1985, Page 154: Supervisor Raymond Laughlin stated that Auditor William Hoak did not approve or disapprove the hospitalization, Hoak was not present at the meeting. Questions raised concerning Superviors' decision to write to PSATS regarding insurance. Supervisors stated no letter was written, a telephone call was made. Mr. Raymond Laughlin Page 7 i. February 3, 1986, Page 165: Robert Larkin resigns as township supervisor. 8. Minutes of the supervisors' meetings also disclosed that premium payments to Columbia were approved as follows: a. February 1, 1979, page 34 - $ 375.42 b. April 5, 1979,_page 37 - $1,068.72 c. June 7, 1979, page 39 - d. July 5, 1979, page 41 - e. August 2, 1979, page 43 - $ 42.00 $ 200.00 $ 158.00 f. November 30, 1980, page 48 - $ 366.84 g. March 6, 1980, page 55 - $1,170.39 h. April 3, 1980, page 56 - $ 392.40 i. June 5, 1980, page 60 - $ 42.00 j. July 3, 1980, page 64 - $ 86.98 k. August 7, 1980, page 67 - $ 32.04 1. February 5, 1981, page 78 - $4,317.89 m. June 8, 1981, page 85 - $ 72.54 n. July 2, 1981, page 88 - $ 140.00 o. February 4, 1982, page 96 - $5,601.49 p. July 1, 1982, page 102 - $ 207.04 q. February 7, 1983, page 110 - $5,425.28 r. July 11, 1983, page 116 - $ 238.05 s. April 1, 1985, page 144 - $5,175.62 (i) $2,339.43 of this amount was for your coverage [see 5 (f)] (ii) There was a refund of $456.52 due to the coverage concellation in January 6, 1986. (see 6) t...r . Payi c Page 8 (iii) T :tal 1985 payment for your coverage was $1,882.91. 9. All of the above.listed payments were approved from the township general fund with the exception of the $200 payment approved cr... July 5, 1979. That payment was approved for payment from Revebiue Account. . 10. Auditor minutes disclosed the following regarding the benef .tc and compensation approved for township supervisors: a. b. January 7, 1975 auditors. There c. January 7, 1976 d. January 4, 1977 were not set. �. January , 1978 supervisors. A benefits set. f. January 4, 1979 supervisors. A benefits set. g. h. January 25, 1980 - Auditors commence audit. Supervisors present to object to the raise. Supervisors asking for the same amount as those in other townships. Auditors decide the salary remains as previously set. i. January 5, 1981 - Township Secretary Robin Roberts asks for $.75 /hour increase for supervisors. Motion approved, no benefits set. i January 8, 1974 - The board of supervisors shall also be authorized to purchase reasonable insurance. The premium shall be paid by the general fund. Note: No motion made but this item follows setting ox wages for supervisors. - Wages for supervisors set by the was no mention of benefits. - No wages or benefits approved. - Wages for supervisors approved. - Discussion regarding $.50 per hour increase - Discussion regarding $.75 per hour increase pay increase approved, no P its for pay increase for approved, no January 3, 1980 - Supervisors requested pay increase. A $.25 per hour increase approved, no benefits set. January 5, 1982 - Motion carried that wages for supervisors reltin the same as 1981. No benefits approved. Mr. Raymond Laughlin Page 9 k. January 4, 1983 - Township Secretary Roberts presents supervisors pay raise request in an amount of $.50 /hour making the rate $5.50 /hour. Voted unanimously that it was not feasible to increase the hourly rate. 1. January 4, 1984 - Supervisors request $.75 /hour raise to $5.75 /hour. Auditors Pansi and Campbell vote "no," Auditor Hoak votes "yes" but for lower rate. Request denied. m. February 1, 1984 - Auditors meet, much discussion about the excessive personal insurance on the supervisors paid for by the township unknowingly. n. February 8, 1984 - Additional discussion about the excessive fringe benefits supervisors have voted for themselves. o. February 8, 1984 - Unanimously approved to send a letter to each supervisor requesting them to present their Columbia Insurance policies to the auditors for examination on February 22, 1984. An oral request was previously refused as being "none of the auditors business." It was noted that premiums for 1983 totalled $6,179.00 and 1984 are $6,767.00. Reported that a call was placed to Marian Nailer, PSATS, who disclosed that supervisors' action may be unethical in voting themselves benefits, but not illegal. Copy of February 13, 1984 letter - Letter requests review of policies to supervisors. p. February 20, 1984 - Meeting held with Supervisors Laughlin, Woodring, Larkin and Columbia Insurance Agent Frank Gigliotti. Policies reviewed, Auditor Pansi questions extravagance of having so much coverage at the township's expense. q January 8, 1985 - Supervisors present to request $1.00 /hour raise to $6.00 /hour. Auditors approve $.75 /hour increase. No benefits discussed. r. January 7, 1986 - Hourly rate for supervisors acting as roadmaster and laborer set at $6.00 /hour. Additional compensation in the form of health benefits was not approved and that such coverage be discontinued. 11. Benezette Township payroll records confirm the following salaries paid to township supervisors: Retyb.,n(. ge 16 b. 1981: Raymond Laughlin $2,511.50 William Woodring $1,356.13 Robert Larkin $1,301.75 1982: d. 1983: e. 1984: William Woodring Thomas Vanvoorhis $ 43.25 Raymond Laughlin $2,015.42 Robert Larkin - $1,570.88 - Raymond Laughlin William Woodring Robert Larkin Raymond Laughlin William Woodring Robert Larkin Raymond Laughlin Robert Larkin William Woodring f. Raymond Laughlin Robert Larkin William Woodring $2,488.75 $1,212.50 $1,000.75 $2,082.75 $2,050.00 $ 380.00 $ 397.50 $2,984.50 $1,862.50 $3,989.96 $3,105.69 $2,487.50 12. Hazel Campbell, Benezette Township Auditor since JannaLT, 1982 provided the following information. a. Since she began serving as auditor, the supervisors have never requested that benefits, particularly hospitalization, be approved. Benefits have never be n approved. b. In early 1984, while auditing 1983 accounts, the auditors became concerned over the amount of money expended on hospitalization. Annual premiums for the supervisors was nearly $7,000 while total tax revenues were only $10,000. The auditors were concerned because the supervisors worked an average of less than (20) hours each month. Mr. Raymond Laughlin Page 11 c. A request was made of the supervisors in January or February to review the policies, the supervisors refused stating it was none of the auditors' business. d. A meeting was held with the auditors and supervisors and Frank Gigliotti. Gigliotti said the plans were legal. Eventually, the supervisors agreed to drop cancer and life insurance coverage as well as hospitalization insurance for the township secretary /treasurer. e. The auditors did not join in this decision or approve the benefits. Advice was received from the Pennsylvania State Association of Township Supervisors to withhold making a decision due to pending court action. f. In 1985, no action was taken to either approve or disapprove the plans and it was decided to let the matter be handled by the State Ethics Commission. g. The auditors never authorized all of the changes made to the policies which included life insurance, disability, family and cancer coverage. 13. William Hoak, Benezette Township Auditor in 1985 and a former supervisor advised as follows: a. The insurance for township supervisors became an issue in 1984 during the audit when the auditors learned of the high premium costs. At that time no decision was made to either approve or disapprove. b. A meeting was held sometime in 1984 with the supervisors, auditors and insurance agent Frank Gigliotti in attendance. The insurance plans were discussed and eventually some of the coverages were deleted. c. In 1985 the insurance was again questioned due to the high costs. The auditors never made a decision to approve or disapprove. d. The supervisors never made a request to have the insurance coverages approved. If asked, he would have voted to approve the insurance. e. The insurance was initially approved in 1974 by the auditors. It was his impression that the auditors were not required to approve the insurance every year. To the best of his knowledge, the insurance was never voted on after 1974. lace 1 f. his opiz,ion '.hat if the supervisors were F.F, <r:e ' t they were not -: =mitted to `lave the insurar.;e, tL y 1-01216 have cancelled the plan. The supervisors believed t. ay T„ entitled to the coverage and that annual auditor approval was not necessary. 14. Robin Roberts, current Benezette Township Secretary who also served from 1977 through 1985 advised as follows: a. Each year she would meet with the auditors to discuss compensation for the supervisors. Her requests %lever included approval for hospitalization medical inPurance. b. The supervisors had coverage when she was appointee secretary in 1977. The plans were upgraded in 198r or 1981. c. The supervisors had various meetings with insurance agent Frank Gigliotti regarding the insurance. These were private meetings. d. The auditors questioned the insurance in 1984 due to the high premium costs. The supervisors became angry and refused to discuss the insurance and stated it was none of auditor's business. c. Later in 1984 her entire insurance coverages and some policies for the supervisors were cancelled by the supervisors. f.. The supervisors continued the hospitalization in 1985. A premium of $5,175.62 for Supervisors Larkin, Laughlia and Woodring was approved for payment at the April 1, 1985 supervisor's meeting. This would have been for coverages for March 1, 1985 through March 1, 1986. • g. The insurances were not renewed in 1986 because of iht auditor's refusal to approve. h. In 1985 the supervisors were provided with informatio.. regarding Ethics Commission decisions by the auditors. 15. William Woodring, Benezette Township Supervisor, provided the following information: a. He has served as a township supervisor the past eight (8) or nine (9) years and is also serving as roadmaster. b. Insurance coverages for supervisors were in effect when he took office. He was added to the plan once he took office, Mr. Raymond Laughlin Page 13 but was not certain if he signed an enrollment form or added to the plan by the township secretary. c. The insurance was not an issue until 1984 when the auditors questioned the costs. At a subsequent meeting some coverages were deleted, but hospitalization and disability were continued. d. Coverages were - continued mainly because the PA State Association of Township Supervisors and the township solicitor both provided information that the insurance was �.. legal. . e. Coverage was maintained through 1985 but was eliminated in 1986 once the auditors stated that they would not approve any additional payments. f. Coverage was only maintained in 1984 and 1985 because the auditors did not formally disapprove the payments. Once the auditors ruled in 1986 to disapprove payments, the supervisors decided it wasn't worth the hassle to try and continue the coverages. 16. Robert Larkin provided the following information to a State Ethics Commission investigator: a. He was appointed to fill the unexpired term of a supervisor who has resigned. He was then elected to serve a full term in 1981. b. He resigned in January, 1986 due problems with insurance, working too many hours for the township without compensation and his health problems. c. The township secretary had him added to the township hospitalization insurancae plans. He was told by the other supervisors, the township secretary and the insurance agent that the policy was legal. d. The auditors questioned the insurance in 1984 because they wanted on the plan but were refused by the supervisors. e. He did not know that the insurance required auditor approval, but the supervisors checked the records and found that the auditor approved the insurance in January, 1974. • f. The matter of auditor approval was never fully explained. Insurance agent Gigliotti said the plan was legal and cited other municipalities where insurance was provided. Ar o Raymond Lat. :gage 14 The township solicitor s: id ..t vas permiss.thle to keep the plan until a ruling was received from the state. h. Once the auditors ruled that peyments would not be approved in 1986, the plan was terminated. g • 17. You provided the following information tro the State Eth!-s Commission investigator: a. The hospitalization was is effect when you took office. You were given an insurance card by their Secretary /Treasurer, Jean Tuttle, wiio said you.were - covered. b. The plan was updated and coverages added by the supervisors but you were told this was legal by the insurance agent, Frank Gigliotti. c. The supervisors needed adequate coverage waxen working because they received very low salaries. d. In 1984 after the auditors questioned the insurance, the riders and coverage for the secretary /treasurer were eliminated. e. In 1985 the auditors never voted to approve or disapprove the insurance. There were only two (2) auditors at that time, Auditor Pauline Pansi died and Auditor_;William Hoak would have voted to approve. f. After the auditors questioned the insurance, the supervisors had meetings with Frank Gigliotti who said the plan was legal and that the supervisors were doing nothing wrong. The supervisors felt powerless to do anything because they thought Gigliotti was correct. g. There was never any intent on the part of the supervisors to violate any laws. 18. Correspondence from Benezette Township Solicitor Richard Masson to the supervisors regarding insurance /compensation disclosed as follows: a. February 13, 1984: The letter quoted the Second Class Township Code, Section 65515 pertaining to compensation for supervisors and also noted: While the Auditors determine the amount of compensation, they must consider the compensation paid f«r similar work in or Mr. Raymond Laughlin Page 15 about the Township. Thus, for road work, the measure of compensation could or should be measured against that of the employees of PennDot. This would necessarily include insurance benefits. That letter also noted: Finally, Section 702, Clause 13, of the Second Class Township Code, 53 Pa. C.S.A. Sect. 65713, permits the expenditure of funds to secure hospitalization insurance for employees, including workmen's insurance, fire insurance for township property, liability insurance for errors and omissions, and group insurance covering life, health, hospitalization, medical service or accident insurance. b. March 16, 1984: This was a letter advising of a review of court case Conrad vs. Township of Exeter, 27 D &C 3d 253 a Berks County case. The letter analyzed the court's ruling and noted: In substance that only employed townwship supervisors may reaceive insurance benefits and that the auditors must approve such beneits as part of the suprvisors compensation. He also noted that auditing the records each year without surcharge does not satisfy the requirement. (Township of Ross vs. McDonald, 60 Pa. Cmwlth. 306, 431 A. 2d 385, 1981.) He concluded that the Benezette Township Auditors should specifically provide that the insurance premiums paid out of township funds are in fact compensation for the supervisors when acting as employees. B. Discussion: As a supervisor in Benezette Township, you are a "public official" subject to the provisions of the Ethics Act and the restrictions therein are applicable to you. 65 P.S. §402; Sowers, Opinion 80 -050; Svzmanowski, Order 539. Section 3(a) of the Ethics Act provides: Section 3(a) of the Ethics Act provides: 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 R - -'ro.cyd J• , c .; of his immediate f .wily, o:: a business with which - • . he is associated. 65 P.S. 403(a). Sectio: 3(a) specifically provides in part that a public off;Fia:. may not use ais public office or confidential information to obt�yn a gain for himself other than compensation provided for by law. The compensation which is allowed for a supervisor is strictly regulated by statutory and decisional law. - Under Section (a) of the Ethics Act, this Commission has previously determined that a township supervisor may not receive rt .he- township's expense, health, hospitalization, medical and life insurance benefits when such supervisor acts only in the capacity of a supervisor. Kane, Opinion 84 -001; Cowie, 84-010. Additionalll, even if such a supervisor is employed by the township as a superintcadent, secretary /treasurer, roadmaster or laborer 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 Svnoski v. Haile Township, 93 Pa. Commw. 168, 500 A.2d 1282, (1985); In re: Appeal of the Auditors Report of Muncy Cre Township, Pa. Commw. Ct. , 520 A.2d 1241 (1987); Hunt, O e :: 348 -R. The foregoing principle was recently reaffirmed by Pennsylvania Commonwealth Court in Yocabet v. State Ethics Commis.ion, Pa. Commw. , 531 A.2d 536 (1987). In the cited case, the Curt held inter alia that a township supervisor violated Section 3(a cj 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 thr. Commission to investigate situations where there is a reasonable belief that financial coni.ct 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, wou.c 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 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 of South Union Township, 47 Pa. Commw. 1, 407 A.2d 906, (1979). Further, the right to sue for the restitution of the financial gain obtained in violation of the Ethics Act has been upheld by Commonwealth Court in Fee v. Commonwealth of Pennsylvania and Township of Union, filed at 1932 C.D. 1987 on December 1, 1987. Mr. Raymond Laughlin Page 17 In the instant matter, you were a non - working supervisor and were enrolled in a medical /life insurance plan at township expense while you were a non - employee supervisor until the expiration of your term in office in December, 1986. Since you were not a working supervisor and since there was no auditor approval, you could not, under the Second Class Township Code, be legally entitled to receive the insurance benefits that were paid at township expense. However, Section 1(c)(2) of House Bill 1577 of 1987, Act 41 of 1988, which was signed into law on March_ 1988, provides in part: "Any life, health, hospitalization, medical service or accident insurance coverage contract between January 1, 1959 and March 31, 1985, that incluaes or provides coverage for non - employee supervisors shall not be void or unlawful solely because such inclusion of non - employee supervisors was ... subsequently found to be without lawful authority. No penalty, assessment, surcharge, forfeiture or disciplinary action of any kind may occur as a result of participation by non - employee supervisors." Since the above quoted provision of law provides amnesty to non - employee supervisor regarding the insurance which was received between January 1, 1959 and March 31, 1985, the Commission finds that there is no violation of Section 3(a) of the Ethics Act for your receipt of those benefits up to March 31, 1985. However, the receipt of the insurance benefits for the period April 1, 1985 through December of 1986 violates Section 3(a) because the receipt of those township paid insurance benefits occurred beyond the amnesty period. The financial gain you received amounts to $1,780.36. The State Ethics Act provides as follows: Section 9. Penalties. (a) Any person who violates the provisions of Section 3(a) and 3(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. Section 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. Section 409(c). Additionally, this Commission may make recommendation to appropriate law enforcement authorities for the initiation of criminal charges or the dismissal of such charges rising out of violations of the State Ethics Act. Prior judicial decisions have also determined that this Commission may offer an individual who has obtained a _ od Lai c hlin Page I ..iaanc ?.al , ,airy in viols. Lion c ti. lEw the or , ortun3 . ty to c iveet ';iiinself of financial g� n prior: t. the issuance of a locommendati On te. law enforcement authority. 7cCutcheon v. State Ethic -s Commjss isc £upra; 65 P.S. $407 (9) (ii) . Iii the instant situation, upon 1. re',/ of all of the facts, the lattor course may be appropriate. 'thus, ?: . the financial gain obtained in violation of the State Ethics Act ?F returned to the governmental body from which it is obtained, you vial have removed yourself from a violation of the Act without having received a financial gain. Therefore, you are directed within thirty 30) days of the date of -this Order to forward a check to the Stat3 ^thics Commission payable to the Order of Benezette ( 2ownship in the amount of $1,780.36. Failure to comply with the foregoing 'sill result in the - referral of this matter to the appropriate law enforcement authority for review and appropriate action. • Conclusion and Order: 1. As a Township Supervisor in Benezette Township, you are a "Public official" subject to the provisions of the Ethic;ii Act. 2. There is no violation of Section 3(a) of the Ethics Act regarding the receipt of medical /life insurance at township expense on your behalf as a non- working supervisor for the period up to April 1, 1985 due to the applicable amnesty provisions in Act 41 of 1988. 3. You violated Section 3(a) of the Ethics Act when you received medical /life insurance benefits at township expense from April 1, 1985 through December, 1986 which amounts to $1,780.36. 4. You are hereby directed to forward a check within t..'rty (30) days of the date of this Order to the State Ethics Commission payable to the Benezette Township in the amount of $1,780.36. 5. Failure to comply with the provisions of paragraph 4 will result in the referral of this matter to the appropriate law enforcement authority for review and appropriate action. Our files in this case will remain confidential in accordance with Section 8(a) of the Ethics Act, 65 P.S. S408(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 ?5- 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. Mr. Raymond Laughlin Page 19 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. 5409(e). By the Commission, k 4440 Joseph W. Marshall, III Chairman Mr—Raymond 0. Laughlin P.O. Box 58 Benezette, PA 15821 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 August 4, 1988 Re: Order No. 656, File No. 86 -084 -C Dear Mr. Laughlin: On July 21, 1988, the State Ethics Commission approved your requested payment method for reimbursing Benezette Township as required by Order No. 656. We have forwarded your check No. 3060 dated July 29, 1988, in the amount of $148.36 to Benezette Township. We will expect checks in the amount of $148.36 on the 30th of each month for a total of 12 months. Your next payment will be expected on August 30, 1988. such. JJC /na This letter will be part of the Order and a public record as cc: Public Binder Sin tino ve Director