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HomeMy WebLinkAbout683-R PalshaMr. Carl Palsha 48 Charles Street Ashley, PA 18706 Re: 88 -055 -C Dear Mr. Palsha: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION ORDER NO. 683 -R DATE DECIDED: February 22, 1989 DATE MAILED: March 7, 1989 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. On January 25, 1989, a hearing on the matter was conducted and relevant evidence and testimony was presented. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: That you, a former Commissioner for Hanover Township, Luzerne County, violated the following provisions of the Ethics Act (Act 170 of 1978), when the township paid for Blue Cross /Blue Shield benefits on your behalf: 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. Code §403(a). A. Findings: 1. You served as a Commissioner for Hanover Township, a First Class Township, from January, 1984 through December, 1985 and from April, 1986 through December 31, 1987. 2. W. Edward Latinski, Secretary /Administrator for Hanover Township, provided the following information from Township records: a. Regular Township employees are provided Blue Cross and Blue Mr. Carl Palsha Page 2 b. The First Class Township Code proh!_bits Township Commissioners from receiving any compensation other than a set payment for attending iaeetings. 3. Township records disclose the following payments were made to Blue Cross and Blue Shield for the coverage provided for you: 1987 January $307.10 February 153.05 March 153.05 April 153.05 May 153.05 June 137.05 July 137.05 August 137.05 September 153.35 October 153.05 November 153.05 Total . 1,789.60 4. W. Edward Latinski, Secretary /Administrator for Hanover Township, Luzerne County, stated the following: a. He has been Secretary /Administrator since January of 1978. b. Hanover Township is a First Class Township. c. Hanover Township records indicate that you were a township Commissioner from April 1, 1986 to December 31, 1987 and January 1, 1984 to December 31, 1985. d. Hanover Township records indicate that the township paid for the Blue Cross and Blue Shield major medical coverage that was provided to you for the year 1987. e. The cost of that Blue Cross and Blue Shield coverage totals $1,789.60 for the entire year. f. The cost of the Blue Cross and Blue Shield premiums for 1987 that was to be paid for the coverage provided all township employees, including the Commissioners, was approved at the Commissioners' meeting December of 1986. 5. Eil Valanus. Secretar' for the To:,rnshio in 19 5 , orn the Mr. Carl Palsha Page 3 a. You approached her at the end of 1986 or the beginning of 1987 and asked if you were eligible for the Blue Cross and Blue Shield coverage that was being provided to the other Commissioners. b. She approached Township Solicitor, Peter Savage, and asked him if you were eligible for the benefits. He told her that you were eligible if the other Commissioners were receiving the same benefits. 6. Peter Savage, Solicitor for Hanover Township, stated the following: a. He has held the position of Solicitor for approximately 5 years. b. He was instructed by the Board of Commissioners, in January of 1988, to review the practice of township commissioners being provided with Blue Cross and Blue Shield coverage paid for by the township. c. He informed the Commissioners in January of 1988, that the practice was improper. d. The board of commissioners decided to request that the commissioners, who received the benefits, make restitution to the Township. e. You were notified, in April of 1988, of the amount of money the township paid for your Blue Cross and Blue Shield coverage. f. When you were informed of the amount of restitution that was being requested, you questioned your liability in the matter and informed the Commissioners that the State Ethics Commission informed you that you may not have to make restitution. g. He was never requested to make a formal inquiry into the legality of the payments for Blue Cross and Blue Shield benefits, for the Commissioners, until January of 1988. h. He may have advised Eileen Valanus, in passing, to place Carl Palsha on the Blue Cross and Blue Shield coverage but does not recall it. 7. Emily Metcalf, former Secretary for Hanover Township; - Mr. Carl Palsha Page 4 a. She was Secretary for Hanover Township for 44 years, retiring in December of 1985. b. The question of the propriety of the payments for the Commissioners' Blue Cross and Blue Shield was researched by her in 1985. She was informed by the State Association of Township Supervisors that the matter was unresolved. c. The Township Commissioners did not discuss the matter at any meeting and did not seek her advice on the matter. 8. James F. McGrath testified as follows: a. He is a Special Investigator for the State Ethics Commission. b. He was assigned and conducted this investigation. c. In interviewing Mr. Latinski, the Secretary of the Township, he was advised as follows: (1) Mr. Latinski is responsible for the records of the cost to the township of the Blue Cross /Blue Shield for the Commissioners. (2) The premiums for you for 1987 were $1,789.60. d. He interviewed the solicitor regarding insurance benefits. (1) The solicitor advised that the Board requested him to conduct an investigation into the question of the legality of township paid insurance benefits. (2) He couldn't recall a conversation with a Mrs. Valanus. e. Mrs. Metcalf was interviewed, who was the retired Secretary of the township. (1) In 1985, the question of the legality of benefits arose in the township. (2) She was told by the State Board that no decision was made as to the legality of benefits. f. You were employed by railroad and had some insurance benefits at that job but lost those benefits at retirement. You approached Mrs. Valunis about the benefits. Mr. Carl Palsha Page 5 h. Mr. Valunis asked the solicitor about insurance benefits and the solicitor said that if the other commissioners received the benefit then you would also be entitled. 9. You related the following information in relation to this situation to a State Ethics Commission investigator: a. You were a Commissioner in Hanover Township from January of 1984 until December 31, 1985 and April of 1986 to December 31, 1987. b. You received Blue Cross and Blue Shield benefits, paid for by the township in 1987. c. You contacted the township Secretary in December of 1987 and asked her if you were eligible for the Blue Cross and Blue Shield coverage that the other Commissioners were receiving. She researched it and told you that you were. d. You don't recall voting to approve the Blue Cross and Blue Shield benefits._ e. You were informed, Township requested for the coverage. admitting guilt to was proper. by the Township Solicitor, that the restitution in the amount of $2,042.40 You felt paying the restitution would be an illegal act and you didn't feel that 10. You provided the following testimony at the hearing: a. You were appointed in 1984 and went off in 1985. b. In the first three months of 1986, you were off the board and weren't aware of these matters. c. About a month before retirement, you went to Mrs. Valanus and asked about Blue Cross /Blue Shield benefits. d. Mr. Valanus stated that she contacted the solicitor who said it was alright. e. You did not ask the solicitor for an opinion as to the legality of insurance benefits B. Discussion: As a first class township commissioner, you are a public official within the purview of the State Ethics Act. 65 P.S. §402; Dodds, 84 -011; Hanlon, 400 -R. As such, your conduct must conform to the requirements of the State Ethics Act. may: Mr. Carl Palsha Page 6 Under Section 3(a) quoted above, this Commission has determined that use of office by a public official to obtain a financial gain for himself or a member of his immediate family or a business with which he is associated which is not provided for in law transgresses the above provision of law. Thus, use of office by a public official to obtain a financial gain which is not authorized as part of his compensation is prohibited by Section 3(a): Hoak /McCutcheon, Orders No. 128, 129, affirmed McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1983); Yacobet, Order No. 4112 -R, affirmed Yacobet v. State Ethics Commission, 109 Pa. Commw. Ct. 432, 531 A.2d 536 (1987). Similarly, Section 3(a) of the Ethics Act would prohibit a public official /employee from using public office to advance his own interests; Koslow, Order 458 -R, affirmed Koslow v. State Ethics Commission, Pa. Commw. Ct. , 540 A.2d 1374 (1988). Likewise, a public official /employee may not use the status or position of public office for his own personal advantage; Huff, Opinion 84 -015. The State Ethics Commission has previously reviewed the question of whether insurance coverage for municipal officials constitutes a financial gain within the above provision of law. See Krane, Opinion 84 -001 and Davis, Opinion 84 -012. In Krane and Davis, wherein this Commission determined that such benefits constituted financial gain. See also Synoski v. Hazel Township, 93 Pa. Commw. Ct. 168, 500 A.2d 1282, (1985); In Re Appeal of the Auditors Report of Muncv Creek Township, 103 Pa. Commw. Ct. 168, 520 1241, (1987). The analysis in those Opinions is adopted as applicable herein; the question is whether this insurance coverage is "provided by law" within the township code. This issue specifically, has been previously considered in relation to First Class Township Commissioners. See Hanlon, Order 400 -R; Dombroski, Order 401 -R. The First Class Township Code provides in part that Commissioners "... make contracts of insurance with any insurance company, or nonprofit hospitalization corporation, or nonprofit medical service corporation, authorized to transact business within the Commonwealth, insuring its employes, or any class or classes thereof, or their dependents, under a policy or policies of group insurance covering life, health, hospitalization, medical and surgical service or accident insurance, .._ Mr. Carl Palsha Page 7 As used in this clause, the terms "employe" and "employes" shall include township commissioners, if the commissioner works on a full -time basis in his capacity as superintendent, road master, laborer or secretary for the township. Such commissioners eligible for inclusion in such plans must meet the same requirements, including hours of employment, as other full -time employes of the township. Other commissioners shall be eligible for inclusion under a policy or policies of group insurance covering life health hospitalization, medical and surgical service or accident insurance only if they pay their pro rata share of the premiums. Such insurance shall be uniformly applicable to those covered and shall not give eligibility preference to or improperly discriminate in favor of, commissioners. As used in this clause, the terms "employee" and "employes" exclude independent contractors and all township engineers and solicitors. Any life, health, hospitalization, medical service or accident insurance coverage contract entered into by a township between January 1, 1959, and December 31, 1984, that includes or provides coverage for commissioners shall not be void or unlawful solely because of such inclusion of commissioners; nor shall any penalty, assessment, surcharge of disciplinary action of any kind occur as a result of such participation by such commissioners; and insurance benefits payable to insureds or their beneficiaries arising out of or on account of deaths, injuries, accidents or illnesses occurring prior to the effective date of this amendatory act shall remain the property of the insureds or their beneficiaries. This Commission has previously ruled that a commissioner in a township of the first class could not receive or secure for himself, through his office, compensation, whether considered monthly tow sa dslimitedob by the See Beeler, Order 560, et. seq. y law. The township code provides that township commissioners may receive certain health, medical, life and insurance benefits if they are also employed by the township in certain capacities. Additionally, the amended First Class Township Code provides that insurance coverage for the years 1959 and December 31, 1984, shall not Mr. Carl Palsha Page 8 be void and said commissioner shall not be charged, or assessed any other penalty as a result of his participation in that plan. The "amnesty" provision in the township code, however, does not go beyond December 31, 1984. As a result, any benefits paid after that period of time on behalf of township commissioners could be subject to assessment under the State Ethics Commission. Further, even if these benefits had been received in good faith riithout any intent to violate the Ethics Act, such a defense is of no avail. Yocabet v. State Ethics Commission, supra. Good faith receipt of such benefits, however, will not alleviate the necessity of a public official reimbursing his governmental body for the receipt of compensation for which he was not entitled. See Allegheny County v. Grier, 179 Pa. 639, 36 A. 353 (1879), Kestier Appeal, 66 Pa. Commw. 1, 444 A.2d 761 (1982). The amount of township funds expended on your behalf for the benefits totaled $1,789.60. This Commission has been authorized to afford public officials who receive a financial gain in violation of the Act the opportunity to,divest themselves of that gain and thereafter take no further action. McCutcheon v. State Ethics Commission, supra; 65 P.S. §407 9(iii). Yocabet v. State Ethics Commission, supra. It is clear from the record in this case that there was no criminal intent on your part and that you imprudently relied upon the advice of the Secretary of the Township and second hand information from the solicitor. However, it is nevertheless true that you received township paid insurance benefits to which you were not entitled as a First Class Township Commissioner. You are hereby directed to forward a check within thirty days in the amount of $1,789.60 to the State Ethics Commission payable to the order of Hanover Township. Failure to comply will result in the referral of this matter to the appropriate law enforcement authority for further action. C. Conclusion and Order: 1. As a township commissioner in Hanover Township, you are a public official subject to the provisions of the State Ethics Act. 2. You violated Section 3(a) of the Ethics Act when you received township paid insurance benefits in the amount of $1,789.60 which was the receipt of a financial gain other than compensation provided by law. Mr. Carl Palsha Page 9 3. You are hereby directed to forward a check to the State Ethics Commission in the amount of $1,789.60 payable to the order of Hanover Township within thirty days of the date of this order. 4. Failure to comply with the provisions of paragraph three will result in the referral of this matter to the appropriate law enforcement authority. 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 respondents consultation with legal counsel. By the Commission, 4 ::::1 " 0:N * K 4 J 4 :01r - Joseph W. Marshall, III Chairman Mr. Carl Palsha 48 Charles Street Ashley, PA 18706 Dear Mr. Palsha: such. JJC /na cc: Public Binder STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 March 17, 1989 Re: Order No. 683 -R, File No. 88 -055 -C On March 17, 1989, the State Ethics Commission received your payment for reimbursing Hanover Township as required by Order No, 683 -R. We have forwarded your check No. 8776 dated March 15, 1989 in the amount of $1,789.60 to Hanover Township. This letter will be part of the Order and a public record as ,JOhn)!C Executive Director