HomeMy WebLinkAbout705-R TomerMr. George E. Tomer
c/o E. Max Weiss, Esquire
911 Diamond Park
Meadville, PA 16335 -2693
Re: 86 -111 -C
Dear Mr. Tomer:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
RECONSIDERATION ORDER OF THE COMMISSION
Order No. 705 -R
Before: Helena G. Hughes, Chair
G. Sieber Pancoast
Dennis C. Harrington
Michael J. Washo
Date Decided: Julv 27, 1989
Date Mailed: August 8 1989
Your request for Reconsideration was received on June 23, 1989,
with respect to the above- captioned Order issued on June 8, 1989,
pursuant to 51 Pa. Code 2.38. The discretion of the State Ethics
Commission to grant reconsideration is properly invoked when:
(b) Any party may ask the Commission to reconsider an order
within 15 days of service of the order. The person
requesting reconsideration should present a detailed
explanation setting forth the reason why the order should be
reconsidered. Reconsideration may be granted at the
discretion of the Commission only where any of the following
occur:
(1) a material error of law has been made;
(2) a material error of facts has been made;
(3) new facts or evidence are provided which
would lead to reversal or modification of the
order and where these could not be or were not
discovered previously by the exercise of due
diligence. 51 Pa. Code S2.38(b).
The Commission, having reviewed your request, must DENY your
request because none of these circumstances are present.
George E. Tomer
Page 2
You submit four major arguments in your reconsideration request
which will be considered seriatim: material errors; Act 41, res
judicata and the vacation pay issue.
In your first argument concerning material errors of law and
fact, you discuss two subject areas: an analysis of various cases
involving the propriety of certain compensation for supervisors and a
review of the township auditors' actions relative to the insurance
benefits for employee supervisors.
In your argument on the applicable decisional law, you discuss
five cases which were cited in the Order. You attempt to distinguish
Svnoski v. Hazel Township 93 Pa. Comm. Ct. 168, 500 A.2d 1282 (1985)
on the basis that the case was limited to the question of whether the
auditors abused their discretion in setting the hourly rate for
supervisors at a lower rate than for the union crew. Such a limited
analysis ignores the full Opinion of Commonwealth Court which
interpreted S515 of the Second Class Township Code to mean that the
auditors have discretion in setting the compensation of employee
supervisors and such compensation specifically includes fringe
benefits such as insurance.
As to the case of In re: Appeal of the Auditors' Report of
Muncv Creek Township 103 Pa. Commw. Ct. 607, 520 A.2d 1241 (1987),
you assert that the case stands for the proposition that non employee
supervisors are not entitled to township paid insurance benefits.
While the foregoing is a true statement, it ignores the following
analysis by the Court as to receipt of insurance benefits by employee
supervisors:
"...5515 of the Code requires
affirmative action by the township
auditors before the township can
purchase insurance contracts covering
the supervisors as employees...." Id. at
1245.
Turning to Yocabet v. State Ethics Commission, 109, Pa. Commw.
Ct. 432, 531 A.2d 536 (1987), you view the case as being limited to
the propriety of a supervisor voting for himself for the position of
secretary /treasurer. However, Commonwealth Court noted that the
Second Class Township Code specifically required auditors to set
compensation for employee supervisors.
You then argue that McCutcheon v. State Ethics Commission, 77 Pa.
Comm. Ct. 521, 466, A.2d 283 (1983) does not support the proposition
that participation by employee supervisors in a township paid
insurance plan requires auditor approval. In particular, you assert
that the case is distinguishable because the program only included
supervisors but excluded township employees and because the payments
George B. Tomer
Page 3
in the program produced a cash surrender value or annuity payout. You..
conclude your analysis of McCutcheon by noting that the decision deals
with pension benefits for supervisors but does not address the
question of hospitalization benefits for township employees which
would include supervisors.
Your analysis totally ignores the legal principles espoused by
the Court in McCutcheon:
"S515 [requires] that the
township auditors shall fix the
amount of supervisors' compensation
where the supervisors serve as
employees." Id. 288.
In accord is the Auditors of South Union Township Appeal, 47 Pa.
Commw. Ct. 1, 407 A.2d 906 (1979), wherein Commonwealth Court clearly
noted that compensation for employee supervisors required auditor
approval.
Two prescribed legal principles emerge from the above cases:
first, supervisors who serve in enumerated working positions must
have their compensation affirmatively fixed by the auditors and
second, compensation includes pension, insurance and other fringe
benefits.
Having established that affirmative auditor approval is required
for township paid insurance benefits for employee supervisors, we will
now focus upon the second aspect of your first argument regarding
whether the auditors gave approval in this case. It is obvious that
you have ignored the operative facts. Although you place emphasis
upon the dispute between Chairman Corbert and the other auditors
regarding the issue of insurance benefits for the supervisors, the
argument is actually self- defeating since you note that "...approval
was intended but wrongfully blocked..." As we previously noted,
decisional law establishes that there must be affirmative auditor
approval to fix the compensation of township supervisors. The facts
in this case reflect that no such affirmative approval was given by
the Board of Auditors.
Turning to the second of your three arguments, you assert that
this Commission incorrectly interpreted Act 41 of 1988 which amended
S515 of the Second Class Township Code regarding compensation of
supervisors. In your view Act 41 only provides amnesty to non
employee supervisors; working supervisors were not accorded amnesty
since they are arguably entitled to receive these benefits as township
employees.
George E. Tomer
Page 4
Your argument in this case fails because your faulty premise
leads to an incorrect conclusion. Act 41 of 1988 which was signed
into law on March 30, 1988, was effective immediately but not
retroactively. The township paid insurance benefits, upon which we
ordered restitution, were received after the amnesty period (1/1/59 to
3/31/85). Nowhere did Section 515 authorize employee supervisors to
receive township paid insurance benefits until the enactment of Act 41
on March 30, 1988 which now authorizes participation by supervisor
employees in such insurance plans without auditor approval subject to
certain requirements in Section C(1). Thus, the insertion of the
language in Section C(1) confirms that employee supervisors, as of
March 30, 1988, could receive compensation in the form of township
paid insurance benefits; Section C(1) changed prior law wherein
supervisor employees were not entitled to such benefits without
auditor approval. Your argument is incorrect because affirmative
auditor action was required to approve township paid insurance
benefits for employee supervisors prior to March 30, 1988, the
effective date of Act 41 of 1988. In this case affirmative action by
the Board of Auditors was lacking and the receipt of the insurance
benefits was a financial gain other than compensation provided for by
law in violation of Section 3(a) of the Ethics Act.
Turning to your argument regarding whether the Commission is
barred from considering the issue of entitlement to township paid
insurance benefits by res judicata resulting from the decision of the
Court of Common Pleas of Crawford County, your argument fails for two
reasons. First, this Commission is the administrative agency
authorized in law to determine whether a public official /employee has
violated provisions of the Ethics Act. 65 P.S. 407. The decision of
the court on a matter of an auditors' report is not a directive to
this Commission regarding fulfilling its statutory obligation to
decide whether a public official /employee has violated provisions of
the Ethics Act. Secondly, the court's holding that the inclusion of
employee supervisors in a nondiscriminatory hospitalization plan did
not require auditor approval is contrary to the foregoing decisions of
the Commonwealth Court of Pennsylvania. Accordingly, the doctrine of
res judicata is inapplicable in the instant matter.
Your fourth and final argument concerns the vacation pay issue.
As to this argument, you merely restate your prior arguments that
auditor approval is not required, that res judicata applies and that
the auditors intended to authorize such compensation that was blocked
by Mr. Corbett. For the reasons noted above, such compensation, being
unauthorized, was a financial gain other than compensation provided
by law.
In light of the foregoing, the State Ethics Commission concludes
that your request for reconsideration must be DENIED.
George R. Tomer
Page 5
Accordingly, you have thirty (30) days from the date of this
Reconsideration denial to comply with the terms set forth in the
original Order. That Order and this decision denying reconsideration
are final and shall be made available as public documents on the fifth
(5th) business day followingthe date of this Order.
e Commission,
elena G. Hughes
Chair