HomeMy WebLinkAbout658 LarkinMr. Robert Larkin
Benezette, PA 15821
Re: 86 -081 -C
Dear Mr. Larkin:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Order No. 658
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.
A. Findings:
1. You served as a Benezette Township Supervisor, for
approximately six years until resigning on February 3, 1986.
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 -3920
Effective date: May 28, 1980
Mr. Robert Larkin
Page 2
Coverage: Disability income benefits, employee OPH
Plan - E
$50 /week, accident and sick plus dependent
coverage, AOR.
b. Policy No.
Effective
Coverage:
c. Policy No
Effective
Coverage:
d. Policy No
Effective
Coverage:
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.
4. 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:
b.
: AKME -0534
date: December 15, 1980
Major Medical - Hospitalization
. : KMC -3920
date: May 28, 1980
Cancer
. : LKSM -3920
date: May 28, 1980
Life
Plan F $10,000.00 plus accidental death and
dismemberment.
Raymond Laughlin, cancer coverage family,
$35.40.
Robin Roberts, Plan B, $138.84
Robert Larkin, cancer, $4.14.
William Wooding, cancer, $30.73.
New business turn -in fcrm 7A ideritifyiny
upgrade in policies.
Undated, handwritten policy change sheet noting change
in hospitalization coverage type from KSM to }ME:
Raymond Laughlin - December 15, 1980 - `$1,616.39.
Robert Larkin - December 15, 1980 - $552.69.
William Woodring - December 15 1980 - $1,207.89.
Mr. Robert Larkin
Page 3
c. January 20, 1981 -. Transfer hospitalization form KSM
to KME (upgrade). Premium costs:
Laughlin $1,616.39.
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. May 30, 1980: New Business Turn -in form identifying
you as replacing Thomas Vanvoorhis.
Policy No. KSM 3920 - $302.29 - 9 months
8.01 - 3 months
$310.30
b. December 20, 1980: Upgrade Cancer coverage $4.14
c. 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
$522.69.
Mr. Robert Larkin
Page 4
d. 1981: Invoice for transfer of hospitalization from
KSM to KME:
AKME: $552.69
e. 1982: Invoice dated 1/19/82,
Policy No. AKME 0533
AKSM 3920
LKSM 3920
i. 1935: Invoice
nc ice .
Invoice dated 6/8/82, due 8/15/82, paid
7/1/82 by check No. 1830:
KMC 3920 - $32.04
f. 12- 7• -82: Memo from Frank Gigliotti to Rosemary Huber
(Columbia) upgradi-ig benefits effective 11-
15 -82. $50.00 weekly disability benefit
added, $9,000 added to life insurance. New
business turn -in form identified cost for
only Laughlin and Woodring as:
Life insurance:
Weekly disability-
g. 1983: Invoice dated 1/19/83, due date 3/15/8:.
AKME 0533
AKSM 3920
LKSM 3920
$681.12
166.89
17.16
$865.17
Invoice dated 1/20/83, due 8/15/83
AKMC 3920 $36.80
11. Invc: ".ce dated 1/6/84, due 3/15/8
AKME 0533 $783.29
AKSM 392C 191.93
,I75.22
1,.'.fe insurance coverage delf!ted LKSM
LKME 0533
due to 3/15/82.
- $604.80 - Accident
- 178.48 - Health
- 17.16
$804.44
of 3/1/35, due 3/15/85. Second
$783.29
Laughlin $58.32
Woodring $33.04
Laughlin $24.95
Woodring $24.95
Mr. Robert Larkin
Page 5
AKSM 3920 $35.21
AKME 0533 - 91.43
$126.64
j
a.
b.
AKSM 3920 230.55
for coverage from 3/15/85
due 3/15/86.
1986: Invoice date 2/28/86, to 3/15/86.
Handwritten on invoice was, the auditor's for
Benezette Township did not approve
hospitalization. Therefore, this policy will not
be renewed. Note signed Janice Wilson, secretary.
6. Your coverage was terminated on February 3, 1986 due
resignation as township supervisor. Columbia records
that refunds were made to the township as follows:
to your
confirm
7. Minutes 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:
insurance for supervisors.
costs of $6,767.47, which
taxes.
Citizens present to discuss
Major concerns expressed at
is more than half real estate
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.
Mr. Robert Larkin
Page 6
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 coverages 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.
c. August 6, 1984, Page 134: Reported that the cancer
policy from Columbia Insurance due, policy to expire
August 15, 1984. Supervisors to consider paying for
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 to 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.
g
Resident James WonderLy states Supervisor William
Woodring has coverage at place of employrent. 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.
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.
Mr. Robert Larkin
Page 7
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 supervisors' decision to
write to PSATS regarding insurance. Supervisors stated
no letter was written, a telephone call was made.
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 - $ 42.00
d. July 5, 1979, page 41 - $ 200.00
e. August 2, 1979, page 43 $ 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
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
Mr. Robert Larkin
Page 8
r. July 11, 1983, page 116 - $ 238.05
s. April 1, 1985, page 141 - $5,175.62
(1) $1,013.84 was payment for your insurance
coverage (see 5 i)
(ii) There was a refund of $126.64 due to the
cancellation of the policy (see 6)
(iii) Total township for your insurance
coverage in 1985 -86 was $887.20
9. All of the above listed payments were approved from the
township general fund with the exception of the $200 payment
approved on July 5, 1979. That payment was approved for payment
from Revenue Sharing Account.
10. Auditor minutes disclosed the follower.; :r.,iarding the
benefits and compensation approved for township supervisoro:
a. 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 of
wages for supervisors.
b. January 7, 1975 - Wages for supervisors set by the
auditors. There was no mention of benefits.
c. January 7, 1976 - No wages or benefits approved.
d. January 4, 1977 - Wages for supervisors approved.
Benefits were not set.
e. January , 1978 - Discussion regarding pay increase for
supervisors. A $.50 per hour increase approved, no
benefits set.
f. January 4, 1979 - Discussion regarding pay increase for
supervisors. A $.75 per hour increase approved, no
benefits set.
January 3, 1980 - Supervisors requested pay increase.
A $.25 per hour increase approved, no benefits set.
h. January 25, 1980 - Auditors commence audit.
Supervisors present to object to the raise.
Supervisors asking for the same amount as those in
g.
Mr. Robert Larkin
Page 9
other townships. Auditors
previously set.
i. January 5, 1981 - Township
for $.75 /hour increase
approved, no benefits set.
7.
decide the salary remains as
Secretary Robin Roberts asks
for supervisors. Motion
January 5, 1982 - Motion carried that wages for
supervisors remain the same as 1981. No benefits
approved.
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."
P•
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.
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.
Mr. Robert Larkin
Page 10
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:
a. 1980:
b. 9.981:
d, 1983:
William Woodring $1,393.38
Thomas Vanvoorhis $ 43.25
Raymond Laughlin $2,015.42
Robert Larkin $1,570.88
c. 1982:
Raymond Laughlin
William Woodring
Robert Larkin
e. 1984:
Raymond Laughlin
William Woodring
Robert Larkin
$2,511.50
$1,35C.13
$1,301.75
$2,488.75
$1,212.50
$1,000.75
tvmond Laughlin $2,082.75
Woodring $2,050.00
Robt2rt Larkin $ 3P0.00
Raymond Laughlin $ 397,50
Robert Larkin $2,984.50
William Woodring $1,862.50
f. Raymond Laughlin $3,989.96
Robert Larkin $3,105.69
William Woodring $2,487.50
12. Hazel Campbell, Benezette Township Auditor since January,
1982 provided the following information.
Mr. Robert Larkin
Page 11
a. Since she began serving as auditor, the supervisors
have never requested that benefits, particularly
hospitalization, be approved. Benefits have never been
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.
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
and Frank Gigliotti
legal. Eventually,
cancer and life
hospitalization
secretary /treasurer.
with the auditors and supervisors
Gigliotti said the plans were
the supervisors agreed to drop
insurance coverage as well as
insurance for the township
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.
Mr. bErt Larkin
Pace 12
c. In 1985 the i-i urance was again questioned due to the
high costs. The auditors never made a decision to
approve or disc.pprove .
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.
f. It is his opinion that if the supervisors were aware
that they were not permitted to have the insurance,
they would have cancelled the plan. The supervisors
believed they were 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 never
included approval for hospitalization medical
insurance.
b. The supervisors had coverage when she was appointed
secretary in 1977. The plans were upgraded in 1980 or
1981.
c, The supervisors had various meetings with insurance
agent
Frank Gigliotti regarding the insurance, These were
priv& ..e 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.
e. 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, Laughlin
and Woodring was approved for payment at the April 1,
Mr. Robert Larkin
Page 13
g
1985 supervisor's meeting. This would have been for
coverages for March 1, 1985 through March 1, 1986.
The insurances were not renewed in 1986 because of the
auditor's refusal to approve.
h. In 1985 the supervisors were provided with information
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 for 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, 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. Raymond Laughlin, former Benezette Township Supervisor,
advised as follows:
a. The hospitalization was in effect when he took office.
He
was given an insurance card by their
Secretary /Treasurer, Jean Tuttle, who said he was
covered.
Mr. Robert Larkin
Page 14
b. The plan was updated and coverages added by the
supervisors but he was told this was legal by the
insurance agent, Frank Gigliotti.
c. The supervisors needed adequate coverage when working
because they 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.
17. 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 for similar work in or
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 Compensation insurance, fire insurance for
Township property, liability insurance for errors and
omissions, and group insurance covering life, health,
hospitalization, medical service or accident insurance.
Mr. Robert Larkin
Page 15
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 township supervisors may
receive insurance benefits and that the auditors must
approve such benefits as part of the supervisors
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.
18. You provided the following information to a State Ethics
Commission investigator:
a. In 1980 you were appointed to fill the unexpired term
of a supervisor who has resigned. He was then elected
to serve a full term in 1981.
b. You 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 you added to the township
hospitalization insurance plans. You were 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. You did not know that the insurance required auditor
approval, but the supervisors checked the records and
found that the auditors 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.
Mr. Robert Larkin
Page 16
g. The township solicitor said it was permissible to keep
the plan until a ruling was received from the state.
h. Once the auditors ruled that payments would not be
approved in 1986, the plan was terminated.
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. S402;
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 of his immediate
family, or a business with which he is
associated. 65 P.S. 403(a).
Section 3(a) specifically provides in part that a public
official may not use his public office or confidential
information to obtain 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
?reviously determined that a township supervisor may not receive
at the 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.
Additionally, even if such a supervisor is employed by the
township as a superintendent, 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 Synoski v.
Hazle Township, 93.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, Order 348 -R. The
foregoing principle was recently reaffirmed by Pennsylvania
Commonwealth Court in Yocabet v. State Ethics Commission, Pa.
Commw. , 531 A.2d 536 (1987). In the cited case, the Court
held inter alia that a township supervisor violated Section 3(a)
of the Ethics Act when he received a salary for the position of
Mr. Robert Larkin
Page 17
secretary /treasurer which
Court, in affirming the
required a restitution of
of its Opinion:
had not been set by the auditors. The
Order of the Ethics Commission which
the financial gain, noted on page 539
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, 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.
In the instant matter, you were a non - working supervisor and
were enrolled in medical /life insurance plans at township expense
during the period you were a supervisor. 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 30,
1988, provides in part: "Any life, health, hospitalization,
medical service or accident insurance coverage contract between
January 1, 1959 and March 31, 1985, that includes 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
a non - employee supervisor regarding 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,
this Commission finds that you did violate Section 3(a) of the
Ethics Act when you received the insurance benefits at township
expense from the period April 1, 1985 to February 3, 1986. The
Mr. Robert. Larkin
Page 18
gain that you received in the past amnesty period amounts to
$842.76.
As a result, this Commission finds that you received
compensation that was not in accordance with that set forth by
law. Generally, the State Ethics Act provides as follows:
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 financial gain in violation of the law the
opportunity to divest himself of financial gain prior to the
issua:.ce of a recommendation to a law enforcement authority.
McCutcheon v. State Ethics Commission, supra; 65 P.S.
5407 (9) (ii) . In the instant situation., upon a review of .1 of
the facts, the latter course may be appropriate. Thus, if the
financial gain obtained in violation of the State Ethics Act is
returned to the governmental body from which it is obtained, you
will 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 State Ethics Commission payable to the Order of
Benezette Township in the amount of $842.70. Failure to comply
with the foregoing will result in the referral of this matter to
the appropriate law enforcement authority for review and
appropriate action.
Mr. Robert Larkin
Page 19
C. Conclusion and Order:
1. As a Township Supervisor in Benezette Township,
you are a "public official" subject to the
provisions of the Ethics 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 to February 3, 1986 which
amounts to $842.76.
4. You are hereby directed within thirty (30) days of the
date of this Order to forward a check in the amount of
$842.76 to the State Ethics Commission payable to the
Order of Benezette Township.
5. Failure to comply with paragraph 4 above 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. 5408(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. 5409(e).
By the Commission,
Joseph W. Marshall, III
Chairman
Mr. Robert H. Larkin
Box 28
Benezette, PA 15821
Dear Mr. Larkin:
such,
JJC /na
STATE ETHICS COMMISSIOIJ1
308 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
December 6,
Re: Order No. 658, File No. 86 -081 -C
On November 28, 1988, the State Ethics Commission approved
your requested payment method for reimbursing Benezette Township
as required by Order No. 658.
We have forwarded your check in the amount of $70.23 to
Benezette Township. We will expect checks in the amount of
$70.23 on the 1st of each month fora total of 12 months.
This letter will be part of the Order and a public record as
cc: Public Binder
Sin
ino
Executive Director