HomeMy WebLinkAbout661 LohrMr. William Lohr
R.D. #2
Eighty Four, PA 15330
Re: 86 -128 -C
Dear Mr. Lohr:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
ORDER NO. 661
DATE DECIDED: August 18, 1988
DATE MAILED: September 13, 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 Supervisor /Roadmaster, in Somerset
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 by
having the township pay for a hospital insurance plan in which you
participated.
A. Findings:
1. You serve as a Township Supervisor in Somerset Township,
Washington County, Pennsylvania.
a. You have served in this position since 1984.
2. Somerset Township had insurance benefits for township employees.
a. These benefits were obtained through the Trustees'
Insurance Fund, Camp Hill, Pennsylvania.
3. You participated in the benefits program and received at the
township's expense hospitalization benefits.
Ar. William Loll
Page 2
4. Minutes of the Somerset Township Board of Auditors meetings from
1970 through and including 1985 do not mention any insurance benefits
as having been approved for township supervisors.
a. The minutes for March 3, 1986 indicate that the auditors
questioned the irregularities of insurance benefits.
5. The Minutes of the meetings of the township board of supervisors
provide as follows regarding insurance benefits for township
supervisors.
January 3, 1972 - Motion Crumrine, second. Cersqa,
hospitalization for permanent employees on S.S. applies to
taose hired prior to January, 3rd. Motion carried.
b. January, 1975 - Crumrine Motion, second Lloyd, to give
fringe benefits to full -time operators. Full
hospitalization for full -time employees and dependents.
c. January, 1984 - Lohr motion, second Brova, to retain all
benefits as present. Full hospitalization same as last
year. Motion carried.
d. January, 1984 - Motion Lohr, second Morrison and approved by
Myers to table any discussion on the employee benefits now.
s. March 17, 1986 - Auditors request concerning irregularities
on the insurance benefits the supervisors received in 1984
and 1985. Auditor Chester advised that the benefits to the
supervisors could be illegal. Solicitor Geary informed the
board of the Ethics Commission ruling that supervisors must
work full -time to receive benefits. Any benefits paid to a
supervisor who is not full -time would be required to
reimburse the township. Auditors recommend that the money
be repaid with interest.
t April 14, 1986 - Lengthy discussion by Solicitor Geary and
Auditor Chester on insurance benefits for supervisors.
Solicitor Geary referred to Act 82 of 1985 passed on
November 29, 1985, a First Class Amendment that states in
order for supervisors to receive health insurance benefits
they must meet the same requirements as full -time employees.
Auditor Chester stated that the auditors never authorized
health benefits for supervisors in this township, back to
1970 there has been no authorization.
6. Premium statements from the Trustees' Insurance Fund, Camp Hill,
P�nnsyivania provide the following information regarding insurance
benefits paid by the township for William Lohr.
Mr. William Lohr
Page 3
a. Statement date: September 14, 1984
(i) Type of coverage: Hospital Surgical
(ii) Effective date: February 1, 1984
(iii)Premium insured: $635.00
(iv) Premium Dependents: $1,523.00
(v) Total premium: $2,158.00
(vi) This statement included coverage from
November 1984 through October 1985.
b. Statement date: September 16, 1985
(i) Premium insured: $635.00
(ii) Premium dependents: $1,523.00
(iii)Total premium: $2,158.00
(iv) The above statement included coverage from
November 1985 through October 1986.
7. Records of the Somerset Township Road District checking account,
No. 3200 - 2784 -878 at the Charleroi Federal Savings and Loan
Association indicate the following regarding township expenditures for
all township employees /offjcials participating in the plan including
yourself.
a. Check No. 878, dated 15, 1984 payable to Trustees'
Insurance Fund in the amount of $10,166.
(i) This payment was for the September 14, 1984
invoice for the township insurance and included
payment for your insurance benefits.
(ii) You signed this check as a township supervisor.
b. Check No. 1379, dated October 7, 1985, payable to
Trustees' Insurance fund in the amount of $10,181.70.
(i)
This payment was for the September 16, 1985,
invoice for the township insurance and included
payment for your insurance benefits.
(ii) You signed this check as a township supervisor.
8. The insurance coverage for you and your dependents cost the
township approximately $180.00 per month.
9. Your insurance coverage was cancelled by the township effective
January 6, 1988.
a. The township received a refund of $1,611.00 from the
Trustees' Insurance Fund as a result of this cancellation.
Mr. William Loh.
Page 4
b. This refund related to the $2,158 that the township expended
for your 1985 -1986 coverage.
c. There was a difference of $547 between what the township
expended in this year and the amount refunded.
10. The township expended $1,260.00 on the insurance benefits for you
during the period April, 1985 through and including October 1985.
a. This amount was the $180.00 pro rated premium over a seven
month period.
11. The amount expended by the township and not refunded amounted to
$1,807.
a. This included the $547 not refunded for the coverage year
1985 -1986. (See Finding 9(c)) and the $1,260 for the seven
month period of coverage from April to October 1985.
12r }.y letter dated May 22, 1986 from Nellie Chester, Secretary,
Somerset Township Board of Auditors to you, Mrs. Chester advises that
the auditors had determined that you were not entitled to insurance
benefits.
a. The letter indicates that the total cost of the benefits was
$2,158.00 and that you were required to make restitution to
that amount, plus six percent interest.
7 Members of the township road crew advised that you did not work
I a1 ---t i_me on the roads.
a. T1w indicated that you would come out to the work site
about two times a week when you first became a supervisor
and tell the crew what to do.
b. You only worked with the crew occasionally.
i4. Your wife provided the following information in relation to this
situation:
Lo She was a township,auditor.
b. She believed that the other auditors knew of the
insurance benefits and approved thereof.
t, :. The issue of insurance benefits was never on the
auditor's agenda.
15. You provided the following information in relation to this
situation:
Mr. William Lohr
Page 5
a. You were working thirty -five hours per week for the
township but only claiming payment for two hours.
b. You had total responsibility for the township roads until
1986 because the other supervisors were employed elsewhere.
c. You were enrolled in the township hospitalization program in
1984.
d. _ The township secretary advised you that you were entitled to
this benefit.
e. In 1986, you received a registered letter from township
auditor Nellie Chester advising you that you were not
entitled to the insurance and requesting restitution
therefor.
f. You defeated Mrs. Chester's husband for the position of
supervisor and believe she was motivated by that factor.
The auditors, as a matter of past practice, knew of the
insurance and approved it.
B. Discussion: As a supervisor in Somerset 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; Szvmanowski, Order 539.
Section 3(a) of the Ethics Act provides:
g.
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.
Mr. killiam Lahr
Page 6
Under Section (a) of the Ethics A :t, this Commission has
previously 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
;secretary /treasurer which had not 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 m:
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
htt :fee McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529,
456 1.$1.2d 283, (1983); Conrad v. Exeter Township, 27 D & C 3d 253
(1993). These principles of law are now well settled and constitute
the JLaw under which this situation must be reviewed. See In Re:
Report of Audit of South Union Township, 47 Pa. Commw. 1, 407 A.2d
F-,C, 0.979). Further, the right to sue for the restitution of the
gain obtained in violation of the Ethics Act has been upheld
L ' :omrti awealth Court in Fee v. Commonwealth of Pennsylvania and
Towr:shio of Union, filed at 1932 C.D. 1987 on December 1, 1987.
In the instant matter, you were not a full -time working
supervisor but were enrolled'in an insurance plan at township
3xp Since you were not a full -time working supervisor and since
the::. was no i.uditor approval, you could not, under the Second Class
Township Code, be :'_egally entitled to receive the insurance benefits
that t were paid -, - t tJwnship expense. In fact, the auditors determined
th ;t ycu were not en to these insurance benefits.
This . :ommissioa m st now give consideration to House Bill 1577 of
:. )87 which . _ s :.mac nea ii'tu law on March 30, 1988 as Act 41 of 1988.
Mr. William Lohr
Page 7
Although Section C of Act 41 addresses the question of amnesty as
to insurance benefits that were received by non - employee supervisors
and hence does not address the question of insurance benefits that
were received by employee supervisors who did not get auditor
approval, it is noted that Section 2 of the Act provides for a blanket
amnesty to "elected officials, except township supervisors who are
provided for in Section 515, [Section C] and appointed township
officials who are not employees of the township." Since working
employee supervisors are elected officials and since this category of
supervisors was not provided for in Section 515, Section 2 is then
applicable which provides:
"Any such insurance coverage contract entered into by a
township between January 1, 1959, and March 31, 1985, that
includes or provides coverage for elected officials, except
as provided in section 515, or appointed township officials
who are not employees of the township, shall not be void or
unlawful solely because such inclusion of such officials 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
such officials."
Section 3(a) of the Ethics Act is implicated as to your receipt
of insurance benefits at township expense up to March 31, 1985;
however, no penalty or assessment may be charged for the receipt of
the benefits in that period due to the amnesty provisions in Act 41 of
1988. The receipt of the insurance benefits for the period April 1,
1985 through January, 1986 violates Section 3(a) of the Ethics Act.
The financial gain you received amounts to $1,807.
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. §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 Lohr
Pace 8
Additionally, this Commission may mcke 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 issuance 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 all 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 Somerset
Township in the amount of $1,807. Failure to comply with the
foregoing gill result in the referral of this matter to the
appropriate 1a w enforcement authority for review and appropriate
action..
C. Conclusion and Order:
1. As a Township Supervisor in Somerset Township, you are a "public
official" subject to the provisions of the Ethics Act.
2. Section 3(a) of the Ethics Act is implicated regarding the
receipt of hosoital insurance benefits at township expense on your
behalf for the period up to April 1, 1985; however, due to the
applicable amnesty provisions in Act 41 of 1988, no penalty or
assessment may he charged for the receipt of the insurance benefits
during that period.
3. You violated Section 3(a) of the Ethics Act when you received
hospital insurance benefits at township expense from April 1, 1985
throucrh Janrary, 1986 which amounts to $1,807.00.
4. You are hereby directed to forward a check within thirty (30) days
of the date of this Order to the State Ethics Commission payable to
the Somerset Township in the amount of $1,807.00.
5. Fail ere to comely with the provisions of paragraph 4 will
result in the referral of this !natter to the appropriate law
enforcement authority for review and appropriate action.
O19r 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 he made available as a public document 15 days
e.Etr service (defined as mailing) unless you file documentation with
the Commission whici° justifies reconsideration and /or challenges
Mr. William Lohr
Page 9
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,
Joseph W. Marshall, III
Chairman
JJC /na
cc: Public Binder
STATE ETHICS COMMISSION
308 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
September 22, 1988
Mr. William Lohr
R.D, 2, Box 302
Eighty Four, PA 15330
Re: Order No. 661, File No. 86 -128 -C
Dear Mr. Lohr:
On September 20, 1988, the State Ethics Commission received
your payment for reimbursing the Somerset Township as required by
Order No. 661.
We have forwarded your check No. 748 dated September 16,
1988, in the amount of $1,807.00 to Somerset Township.
This letter will be part of the Order and a public record as
such.
C
ontino
Execp ive Director