Loading...
HomeMy WebLinkAbout706 StanfordMr. Rex Stanford c/o E. Max Weiss, Esquire 911 Diamond Park Meadville, PA 16335 -2693 Re: 86 -112 -C Dear Mr. Stanford: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Order No. 706 Before: Helena G. Hughes, Chair Robert W. Brown, Vice Chair W. Thomas Andrews G. Sieber Pancoast Dennis C. Harrington James M. Howley Date Decided: June 1. 1989 Date Mailed: June 8, 1989 The State Ethics Commission received a complaint regarding you and a possible violation of the State Ethics Act, No. 170 of 1978, 65 P.S. 401 et. seq. You were notified in writing as to the commencement of the investigation and as to the specific allegation(s). The investigation has now been completed and a Findings Report was issued to you which constituted the Complaint by the Investigation Division of the State Ethics Commission. An Answer was filed and a hearing was waived. The record is now completed. This Order of the Commission is hereby issued which sets forth the individual allegations, findings, discussion and conclusion as follows: I. Allegation: That you, a Richmond Township Supervisor, violated the following provisions of the Ethics Act (Act 170 of 1978), in that you authorized payments from township funds for medical and disability insurance premiums for yourself and spouse without receiving auditor approval: Section 3. Restricted Activities. (a) No public official or public employee shall use his public office or any confidential Mr. Rex Stanford Page 2 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). A. Findings: 1. You have served as a Township Supervisor in Richmond Township, Crawford County, for at least the past five years. 2. You were appointed roadmaster in each year that you served. a. You were not a full -time roadmaster. as roadmaster was set by the township b. Your compensation auditors. c. You assert that the auditors had an understanding that compensation only related to an hourly rate of payment but did not extend to benefits. 3. Minutes of the Richmond Township Auditors' meetings disclosed the following regarding the compensation that was set for the township supervisors. a. January 4, 1977: Hourly rate was increased by 10% or from $4.00 to $4.40 per hour. The person acting as superintendent and taking care of the necessary book work is to receive an additional $.25 per hour for these services. Use of personal vehicles for township business will remain the same, at $.12 per mile. Vacations remain the same. That is, if previous year working hours average out to a forty hour week, they are to be entitled to a two week vacation with pay. Paid holidays are to remain the same: Christmas, New Year's, July 4th, Thanksgiving, and Labor Day. b. January 3, 1989: Supervisors' wages are to The supervisor acting as the necessary book work remain the same at $4.75 per hour. superintendent and taking care of if to receive $.25 per hour for lir. Rex Stanford Page 3 these services. Use of personal vehicles for township business will remain the same at $.12 per mile. Two additional holidays were added to paid holidays: Good Friday, and Memorial Day. Personal vacations are to remain the same. c. January 8, 1980: Supervisors' wages were raised from $4.75 to $5.25 per hour. The supervisor acting as superintendent and taking care of the necessary book work if to receive $.25 per hour for these services. Use of personal vehicles for township business will change from $.12 to $.17 per mile. Personal vacations and holidays are to remain the same. d. January 7, 1981: The township supervisors' wages remain the same at $5.25 an hour and $5.50 (for supervisor doing book work). Mileage will remain at $.17 a mile. Vacations will remain the same and holidays will be increased a day. Washington's Birthday (Feb. 16, 1981). e. January 5, 1982: Recommendation that George Tomer, Road Foreman, continue to furnish his own pick -up truck for township business at a mileage rate per mile with gas furnished by the township. Supervisors' wages were revised from an hourly rate of $5.25 to $5.75 per hour. The one as superintendent and taking care of the necessary book work will increase from $5.50 to $6.50. Use of personal vehicles for township business will change from $.17 to $.20 per mile for these services. f. January 4, 1983: Supervisors' wages to be increased from $5.75 to $7.25 per hour. The roadmaster's wages to be increased from $6.50 to $8. Mr. Rex Stanford Page 4 g. Gasoline mileage rate to remain the same at $.20 per mile. George Tomer to continue to use his personal pick -up truck for township business and proposes a mileage rate per mile of ($.20) with gas furnished by the township, provided a daily log be kept showing: date, person, quantity of gas, mileage and purposes. Recommendation of the auditors that the township buy a pick- up truck with a continuing use of a log book and that the secretary /treasurer of the township be paid mileage for township business. January 2, 1984: Supervisors wages increased by 5% to $7.61 per hour, and the roadmaster to receive $8.40 per hour. Auditors: Twila Carpenter, Jeanne Ervin and Kerry Corbett. h. March 1, 1984: Kerry Corbett to submit his own list of recommendations to the supervisors rather than sign the letter of recommendations previously agreed upon and signed by Jeanne Ervin and Twila Carpenter. i. April 2, 1984: Reply from the Richmond Township Supervisors to the auditors in regard to the auditors' letters of recommendations. 1. Attempts to be made to up -date a fuel log book which will include: destination, purpose, driver, fuel, mileage and date. Supervisors express the feelings that date, driver, and gallons, along with general job description, to be kept in the truck, is sufficient. 2. Attempt to keep a daily log book which would include hours worked, and work performed. 3. In the process of establishing an equipment and tools inventory record book, equipment repair book and a one a year inventory of other items. Signed by Supervisors Tomer, Stanford and Peters. Mr. Rex Stanford Page 5 J. January 8, 1985: Supervisors wages to be increased 3% with no limit on hours. Supervisors wages $7.84 per hour, roadmaster wages $8.65 per hour. Vote was two to one, Corbett dissenting. Reimbursement for individuals using vehicles for township business, $.20 per hour for actual expenses, providing proof is submitted. k. April 12, 1985: Amendment to the following minutes requested by Corbett: January 24, 1985 - to read that the vacation matter was not acted upon and is pending. March 1, 1985 - Corbett tabled the vacation issue until the January, 1986 organizational meeting. Road inspection fee to be the same as the hourly rate for employees. Motion was made and seconded to authorize ten days of paid vacation for any employee who averaged forty hours per week during the previous year, to be paid at the regular hourly rate of wage, this would also include eight paid holidays. Chairman Corbett would not call for a vote, roll call or otherwise. Ervin stated that due to the auditors inadvertently omitting any reference to vacation pay in 1982 and 1983, which had the subject not been overlooked, would have been addressed as in previous years. Ervin made the motion that vacation pays for the years 1982 and 1983 as taken by any employee or employees meeting the forty hours average work week rule for those years be approved including the eight paid holidays. Carpenter seconded the motion. Chairman Corbett would not call for a vote, roll call or otherwise. Ervin made a motion to approve the vacation pay for 1984 as taken by any employee or employees meeting the forty hour average work week rule for the year and to also include the Mr. Rex Stanford Page 6 eight paid holidays. Seconded by Carpenter. Chairman Corbett allowed no vote, the motion. 1. January 7, 1986: Roadmaster wage to remain the same - $7.60 per hour. roadmaster is to stipulate his hours worked and the type of work performed. Road supervisor wage set at $8.00 per hour with the hours being stipulated and the type of work performed. Road inspection rate set $7.60 per hour for all supervisors. - 5 days for 35 hours per week for the the rate of $8.00 per hour. Ten (10) days week for the previous year at the rate of Vacation time to be noted on work record as Vacation Policy previous year at for 40 hours per $8.00 per hour. such. roll call or otherwise on Insurance - to continue as is until the auditors make a further determination during the disposition meeting. Holidays (paid vacation days) - to include Christmas, New Years, Good Friday, Labor Day, 4th of July, Memorial Day and Thanksgiving. Request by the auditors that detailed work records be kept on all township employees, except the Secretary. Secretary to keep a diary of her daily activities. m. February 27, 1986 - Disposition Meeting: Insurance - medical coverage was disallowed for supervisors at this point in time. n. January 6, 1987: Vacation Policy - retained the same as set in 1986. Wage Rate - retained the same as set in 1986. Holidays (paid vacation days) - retained the same as set in 1986. Insurance - disallowed, the same as in 1986. o. February 26, 1987: Vacation Policy - redefined to read, 5 - eight hour days for Mr. Rex Stanford Page 7 30 hour per week for the previous year at the rate of $8.00 per hour; 7 eight hour days for 35 hours per week for the previous year at the rate of $8.00 per hour; and 10 - eight hour days for 40 hours per week for the previous year at the rate of $8.00 per hour. You indicate the following relative to the above finding: 1. The auditors were not aware that insurance had to be reviewed and approved as compensation. 2. The January 5, 1982 and January 4, 1983 minutes do not reflect that vacation /holidays were discussed, known and intended by the auditors. 3. The minutes do not reflect that the use of Tomer's pick up truck at $.20 per mile with township gas for township business. 4. Auditors Carpenter and Ervin approved the 1983 March 1, 1984 and filed same with the Clerk of audit on Courts. 5. Auditor Corbett, Co- Chairman, dominated the and dissented from the wage increase. 6. In the May 12, 1985 meeting, Corbett employed an amendment procedure to re -unite the 1985 minutes of the organizational meeting to say that the vacation matter was not acted upon and was tabled until the following year. Although Ervin and Carpenter favored paid vacation /holidays, Corbett refused to allow a vote on the matter. meetings 7. Chairman Corbett tabled the approval for the April 12, 1985 minutes at the January 7, 1986 meeting. After noting that the minutes reflect a statement by Kerry Corbett that the vacation issue must be defined, it is argued that Corbett's attempt on April 12, 1985 to amend the minutes was a nullity. The January 7, 1986 meeting was the first time when the auditors mentioned insurance. 8. The discontinuation of medical coverage at the February 27, 1986 meeting constitutes an implied acknowledgement of a permitted benefit in prior years. 4. Minutes of the Meetings of the Richmond Township Supervisors reflect the following in regard to the appointment of road foremen /superintendent, and hospitalization. Mr. Rex Stanford Page 8 a. January 3, 1983: Motion by Stanford, seconded by Wade, to appoint George Tomer road foreman, Carried. Motion by Tomer, seconded by Wade, to appoint Rexford Stanford roadmaster. Carried. Motion by Stanford, seconded by Tomer, to appoint Merrill Wade roadmaster. Carried. Motion by Wade, seconded by Stanford, that we recommend to the auditors a 7% raise for the supervisors. Present: Wade, Stanford, Tomer. b. January 2, 1984: Motion by Stanford, seconded by Tomer, to appoint Jerry Peters roadmaster. Carried. Motion by Peters, seconded by Tomer, to appoint Rexford Stanford roadmaster. Carried. Motion by Stanford, seconded by Peters,, to appoint George Tomer a roadmaster /foreman. Carried. c. March 1, 1984: Letter of recommendations by Auditors Ervin and Carpenter received and read. Supervisors agree to consider the recommendations. Auditor Kerry Corbett will give his recommendations after consulting with his counsel. d. January 7, 1985: Motion by Stanford, seconded by Tomer, that a full -time employee for three years receive one weeks vacation and two paid holidays. Three ayes. Motion by Stanford, seconded by Peters, to appoint George Tomer road superintendent. Two ayes. Motion by Tomer, seconded by Peters, to appoint Rexford Stanford roadmaster. Two ayes. Motion by Stanford, seconded by Tomer, to appoint Jerry Peters roadmaster. Two ayes. Motion by Stanford, seconded by Peters, to appoint George Mr. Rex Stanford Page 9 Tomer roadmaster. Two ayes. e. May 2, 1985: Correspondence read including letter of recommendations of auditors. f. November 7, 1985: Insurance discussed, will meet with agent later. Present: Peters, Stanford and Tomer. g. December 5, 1985: Motion by Stanford, seconded by Tomer, to adopt the ordinance, allowing the setting of wages of township supervisors. Three ayes. h. January 6, 1986: Motion by Stanford, seconded by Tomer, that any full -time (30 hours per week) receive medical and hospitalization insurance for self and family. Three ayes. Motion by Peters, seconded by Stanford, Tomer road superintendent. Three ayes. Motion by Tomer, seconded by peters, Stanford roadmaster. Two ayes. Motion by Stanford, seconded by Tomer, Peters roadmaster. Two ayes. i. July 2, 1986: Receipts - $297.12 - George Tomer. j. August 7, 1986: Receipts - no payment for insurance premium by Tomer. k. September 4, 1986: Receipts - $327.12 - G. Tomer. 1. October 2, 1986: Receipts - no payment for insurance premium by Tomer. to nominate George to nominate Rexford to nominate Jerry Mr. Rex Stanford Page 10 m. November 6, 1986: Receipts - $272.22 - Tomer. n. November 18, 1986: Peters met with the auditors on November 19, 1986. The auditors made the following propositions. Surcharges in 1987 for the year 1986 could be avoided if the following were done: Not reappoint present secretary for 1987. Not make any appropriations of funds to recreation board. Tomer to take early retirement at the end of 1986 and not complete his term. Peters stated to the auditors that it was his opinion that none of the three items would be considered. Receipts o. December Receipts - $165.61 - Tomer. 29, 1986: - $288.41 - Tomer. $348.86 - Tomer. p. January 5, 1987: Motion by Stanford, seconded by Tomer, to raise the wages of full -time employees $.25 per hour, one week vacation, two floating holidays plus Christmas. Three ayes. Motion by Stanford, seconded by Peters to appoint George Tomer road superintendent. Two ayes. Motion by Tomer seconded by Stanford to appoint Jerry Peters a roadmaster. Two ayes. Motion by Peters, seconded by Tomer, to appoint Rexford Stanford roadmaster. Two ayes. Motion by Stanford, seconded by Peters to appoint George Tomer roadmaster. Two ayes. Recommend to the auditors that supervisors hourly rate remain the same. Wr. Rex Stanford Page 11 q. You agree that the minutes of the township meetings are accurately summarized but add the following commentary. 1. The Wage Ordinance was based upon a statute and followed a form provided by the State Association of Township Supervisors. 2. At the January 16, 1986 meeting, the approval of medical /hospitalization coverage for employees did not include Tomer; likewise, the approval of vacation /holiday benefits were for employees other than supervisors. 3. After the auditors voted to disallow medical benefits for supervisors in February 1986, Tomer reimbursed the township for subsequent months, April through December of 1986. 4. The November 18, 1986 minutes reflect a political dispute between a newly constituted group of Auditors and Supervisors. 5. Richmond Township provided medical, hospitalization and other insurance benefits for township employees: a. This insurance was obtained through Columbia Life Insurance Company, Bloomsburg, Pennsylvania. b. You participated in the insurance program. c. You admit the finding but add the following information: 1. Although the first group insurance plan was purchased from Columbia, the township changed to I.D.S. on August 7, 1980 but then reverted back to Columbia on February 18, 1982 due to dissatisfaction with I.D.S. 2. You left the plan on February 6, 1986 and on February 7, 1986 gave the township a check in the amount of $132.84 for the January, 1986 premium payment. 6. Richmond Township records regarding invoices submitted by the Columbia Life Insurance Company to the township indicate the following premium payments for your coverage: a. Policy NO. AKME 1462. Billina Date 3 -15 -85 Amount $385.14 Mr. Rex Stanford Page 12 4 -12 -85 $192.57 5 -10 -85 $192.57 6 -14 -85 $192.57 7 -12 -85 $192.57 8 -9 -85 $117.59 9 -13 -85 $117.59 10 -11 -85 $117.59 11 -22 -85 $117.59 12 -13 -85 $117.59 Total 1985: $1,743.37 b. Policy No. ARSM 5274: Billing Date Amount 3 -15 -85 $47.14 4 -12 -85 $23.57 5 -10 -85 $23.57 6 -14 -85 $23.57 7 -12 -85 $23.57 8 -9 -85 $23.57 9 -13 -85 $23.57 10 -11 -85 $23.57 11 -22 -85 $23.57 12 -13 -85 $23.57 Total 1985: $259.27 c. Policy No. LKSM 5274 - Life Insurance.. pilling Date, Amount Mac. Rex Stanford Page 13 3 -15 -85 $32.70 4 -12 -85 $16.35 5 -10 -85 $16.35 6 -14 -85 $16.35 7 -12 -85 $16.35 8 -9 -85 $18.90 9 -13 -85 $18.90 10 -11 -85 $18.90 11 -22 -85 $18.90 12 -13 -85 $18.90 Total 1985: $192.60 7. Total payments by the township for your insurance coverage amounts to: 1985 a. Policy No. ARMS 1462: $1,743.37 b. Policy No. AKSM 5274: $ 259.27 c. Policy No. LKSM 5274: $ 192.60 Total: $2,195.24 8. You terminated your participation in the insurance program at the end of 1985. 9. In 1985, Township auditor, Kerry D. Corbett and Citizen Virginia Wade filed an appeal from the auditors report the year 1984 for Richmond Township. a. One of the items included in said appeal related to the receipt of medical and hospitalization insurance by the supervisors. b. The appeal was filed in the Court of Common Pleas of Crawford County Pennsylvania (A.D. 1985 - 321). Mr. Rex Stanford Page 14 10. In a memorandum opinion dated February 25, 1987, the Honorable Judge Robert L. Walker dismissed the appeal. a. In relation to the supervisor's inclusion in the insurance benefits programs, the court found that such was proper. b. The Court reasoned that medical and hospitalization plans had no cash value, covered all township employees and were distinguishable from the type of plans noted in McCutcheon v. Commonwealth State Ethics Commission. c. You add that the appeal was dismissed as to all surcharge issues, including the vacation issue. 11. Twila A. Carpenter provided the following information in relation to the instant situation: a. She served as a township auditor in Richmond Township from 1982 through November, 1985 at which time she resigned. b. In 1984 and 1985 she served with Auditors Jeanne Ervin and Kerry Corbett. c. She first became aware of the issue regarding insurance benefits when she received a copy of the petition appealing the auditors report for the year 1984. d. She testified in that proceeding that the auditors had received no notification that they were required to approve hospitalization benefits for the supervisors. e. Mr. Corbett, if he was aware of this as chairman of the board of auditors, should have advised the other auditors of this requirement at the reorganizational meeting. f. While auditing township's records, she recalled reviewing checks regarding the payment by the township of the insurance premiums. As a result of this review, she was aware that both Supervisors Tomer and Stanford were participating in the township insurance program. g. She was unaware that the auditors were required to approve insurance benefits for the supervisors. h. Had she been aware of this requirement she would have approved the benefit coverage for both Tomer and Stanford. i. She would have immediately approved it for Mr. Tomer since he was a full -time working roadmaster. Mr. Rex Stanford Page 15 j. Prior to approving such for Mr. Stanford, she would have wanted to review the number of hours that he was working, since he was not full -time. k. The auditors did not discuss to any extent, the insurance benefits in 1984 or 1985, prior to receiving the petition appealing the auditor report. 1. She would not have approved the insurance coverage for Supervisor Peters because he was not a full -time employee on the road crew and in fact, he was not working very many hours. 12. Jeanne Ervin provided the following information in relation to the instant situation: a. She served as a township auditor for Richmond Township for six years from 1980 through December 1985. b. In 1984 and 1985, she served with auditors Twila Carpenter and Kerry Corbett. c. Mr. Corbett was chairman of the board both years. d. The issue of insurance coverage for township supervisors working on the roads was not included on the agenda of the reorganizational meetings during these years. e. She assumed that since there had been a past practice of providing insurance for township supervisors working on the roads, that such was appropriate to continue. f. Mr. Corbett did not believe that Tomer and Mr.Stanford were entitled to insurance coverage because it had not been approved at the reorganizational meeting. g. She felt that since it had been a past practice of the township to provide such benefits, that such was not required to be approved in subsequent years. h. She was unaware that the insurance issues and other issues had to be voted on in each year. i. You deny that insurance was not discussed by the auditors until January 7, 1986. You assert that Corbett took the position that holidays /vacations could not be taken unless approved at reorganizational meetings and also blocked the efforts of Ervin and Carpenter to approve those items. 13. Aola DiFrancesco provided the following information in relation Mr. Rex Stanford Page 16 to the instant situation: a. She is an auditor for Richmond Township. b. She serves as the secretary of the board of auditors and as such, maintains all of the auditor books and records. c. In 1986, Mr. Stanford was off of the township insurance plan. Only Mr. Tomer's participation was in question at that time. d. She and auditor Rebecca Schreffler did not want to eliminate Mr. Tomer's insurance coverage. e. Auditor Kerry Corbett wanted to eliminate Mr. Tomer from the plan immediately. f. During one of the auditor meetings, there was a motion for the insurance to be retained until there was an opportunity to research the issue. She indicated that she would not vote for or against removing Mr. Tomer from the plan until such opportunity was afforded. g. She read through all of the minute books for the auditor meetings from 1962 through 1985 and found that the insurance had never been approved for the supervisors as part of an official auditor meeting. h. She felt that if it was never presented and approved by the auditors then they would not be in the position of taking something away from Mr. Tomer. i. Mr. Corbett was against providing the insurance to the supervisors and Ms. Schreffler was in favor of it j. She voted to take it away from Mr. Tomer but they really weren't taking anything away because he had never officially received it. k. Mr. Tomer paid for his own participation in the plan from March, 1986 through 1988, at which time the auditors approved his inclusion in the plan. 1. The auditors were considering surcharging the supervisors for the premium payments that had been made by the township on their behalf, however, they never took such action. E. When the auditors voted in January of 1986 to leave the plan intact until they could research the issue, it was their intention that the township should pay for the months of January and February, 1986. g. Mr. Rex Stanford Page 17 n. You provide the following commentary as to DiFrancesco's statements. 1. Her reference to one auditor meeting might refer to the January 7, 1986 meeting regarding the referencing of insurance. 2. The auditors knew that the. supervisors were participating in the insurance plan. 3. The auditors did not know that their approval was needed. 4. Tomer realizes that he needs to reimburse the township for March, 1986. 14. Kerry Corbett provided the following information in relation to the instant situation: a. Corbett previously served as an auditor for Richmond Township. b. In 1984, two of the three auditors were new and were in the middle of a very adversarial situation. c. The auditors were very clear on some items but they did not have the opportunity to investigate the insurance issue. d. The auditors did not want to take something away from the supervisors if it was appropriate for them to have it. e. In 1986, the auditors intended the insurance coverage to be eliminated. f. Mr. Tomer should have picked up the premium starting in March, if he wanted to stay on the township plan. Corbett indicated that he had made Tomer aware that the insurance coverage was questionable for him in 1985. h. You submit the following relative to the information supplied by Corbett. 1. Ervin began service as an Auditor in 1980, Carpenter in 1982 and Corbett in 1984. 2. The auditors were clear on some items and had the opportunity to investigate the insurance issue. Mr. Rex Stanford Page 18 3. The minutes did not reflect Corbett's reason for wanting to keep supervisors out of the plan. 4. Although Corbett opposed the coverage, Schreffler opposed its elimination and DiFrancesco was uncertain. After Corbett left as an auditor, DiFrancesco, Schreffler and Binge voted to reinstate coverage. 5. It is denied that Corbett made you aware in 1985 that insurance coverage was questioned. 15. You declined the opportunity to be interviewed or make a statement in relation to the instant situation: a. Your counsel did provide information relating to your payment for your participation in the insurance program during 1986. (See Finding No. 8). b. You have submitted the following additional information: 1. Ervin and Carpenter believe they overlooked certain compensation issues in the January 1, 1985 organizational meeting. 2. In a January 24, 1985 meeting, the auditors had a lengthy discussion about the omission of vacation time from the meetings beginning in 1982 but the matter was tabled. 3. At a meeting in early 1985, Corbett was shown a letter of DCA suggesting the auditors advertise for a public meeting and also an opinion from the Association of Township Supervisors that a meeting should be scheduled to resolve compensation issues. The minutes of the March 9, 1985 meeting reflect certain remarks and an adjournment without the opportunity for auditor action. 4. Because business could not be conducted at the March 1, 1985 meeting, Carpenter and Ervin attempted to reschedule a March 15, 1985 meeting but Corbett obtained an ex parte preliminary injunction. An answer was filed to the Petitioner for injunction and a Motion to Quit the Petitioner and Dissolve the injunction was filed. 5. An April 12, 1985 meeting was held but Corbett thwarted a vote. Corbett then filed a surcharge action which was dismissed. 6. Tomer and Stanford fall within the preview of Act 41 Mr. Rex Stanford Page 19 of 1988. B. Discussion: As a township supervisor, you are a public official as that term is defined in the State Ethics Act. 65 P.S. 5402; Sowers, Opinion 80 -050. As such, you are subject to the provisions of the Ethics Act and the restrictions therein are applicable to you. Generally, the State Ethics Act provides as follows: 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). Within the above provision of law, 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. Krane, Opinion 84 -001; Cowie, Opinion 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 Svnoski v. Hazle Township, 93 Pa. Comm. 168 500 A.2d 1282, (1985); In re: Appeal of the Auditors Report of Muncv 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, 109 Pa. Commw. Ct. 432, 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 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 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 aain." (Emphasis supplied). Any benefits received other than as provided for above, would constitute a financial gain obtained in violation of the State Ethics Mr. Rex Stanford Page 20 Act. See McCutcheon v. State Ethics Commission, 77 Pa. Cmwlth. 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). In the instant matter, you are the appointed roadmaster. The record reflects that you received township paid medical and disability insurance benefits from your enrollment in that program until you terminated participation on February 6, 1986; on February 7, 1986 you gave the township a check in the amount of $132.84 for the January, 1986 premium payment. The resolution of the issue of your entitlement to the insurance benefits turns upon whether the requisite auditor approval was given. The fact that the auditors were unaware that benefits were compensation or did not disapprove the benefits or tacitly knew of the existence of the coverage or may have wanted to provide it despite the opposition of the Chairman of the Board of Auditors is not diapositive of the issue of whether there was auditor approval. In order for working supervisors to receive township paid insurance benefits, a positive approval action by the auditors is required. As Commonwealth Court noted in McCutcheon: "Although the auditors reviewed the township accounts and fail to surcharge the supervisors for their pension contract, we cannot say that the auditors affirmatively fixed the compensation amounts as required by section 515." Id at 288. In this case, the record is devoid of affirmative action by the Board of Auditors to approve these benefits which must be considered as unauthorized. Under these circumstances, you received insurance benefits without the requisite auditor approval and hence you received a financial gain which is not part of your authorized compensation. See McCutcheon v. State Ethics Commission supra. It should also be noted that received in good faith, such would receipt of such benefits, even when will not alleviate the necessity of governmental body for the receipt of not entitled. See Alleahenv County • even if these benefits had been not be controlling. Good faith based upon a solicitor's advice, a public official reimbursing his a financial gain for which he was v. Grier 179 Pa. 639, 36 A. 353, Mr. Rex Stanford Page 21 (1987); McCutchegn v. State Ethics Commission, supra; Kestler Appea 66 Pa. Commw. 1, 444 A.2d 761, (1982). As a result, you must reimburse the township for this financial gain. 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. S409(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). In addition to the above, the State Ethics Act provides that the Commission may forward the results of any investigation to the appropriate prosecuting authority unless the alleged offender removes himself from the conflict of interest by divesting himself of any financial gain received in violation of the State Ethics Act. 65 P.S. S407 9(iii). See also McCutcheon v. State Ethics Commission, supra, the Commission may order restitution of financial gains received in violation of the law. The last matter relating to insurance benefits which must be addressed by this Commission concerns House Bill 1577 of 1987 which was signed into law on March 30, 1988 as Act 41 of 1988. 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 525, [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 and 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 Mr. Rex Stanford Page 22 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." Therefore, under the above provision of law, any insurance benefit that you received between January 1, 1959 and March 31, 1985 would be implicated by Section 3(a) of the Ethics Act but no penalty or assessment will occur because of the above amnesty provision. The receipt of said insurance benefits after March 31, 1985 would transgress Section 3(a). In this case, you received a financial gain of $1,464.58 for the period of April 1, 1985 forward. The foregoing amount must be returned to your governmental body, Richmond Township. C. Conclusion and Order: 1. As a township supervisor in Richmond Township, you are a "public official" and, as such, are subject to the provisions of the Ethics Act." 2. Section 3(a) of the Ethics Act is implicated when you received various insurance benefits at township expense for the period up to March 31, 1985; however, since House Bill 1577 of 1988, which was signed into law as Act 41 of 1988, provides amnesty as to the receipt of those benefits, no penalty or assessment will occur for that period. 3. You violated Section 3(a) of the Ethics Act when you received a gain through public office consisting of township paid insurance benefits which gain is not compensation provided for by law in that such benefits had not been fixed and approved by the township auditors as part of your lawful and authorized compensation during the period between April 1, 1985 and the time you terminated participation, which gain amounts to $1,464.58. 4. You are hereby ordered to remit to the State Ethics Commission, within thirty (30) days of the date of this order, the amount of $1,464.58 made payable to Richmond Township as restitution for the financial gain that you received. 5. Failure to comply with the provisions of this order will result in a referral of this matter to the appropriate law enforcement authority for further civil or criminal proceedings. This Order is final and will be made available as a public Mr. Rex Stanford Page 23 document fifteen days after issuance. However, you may request reconsideration which will defer public release of this Order pending action on your request by the Commission. A request for reconsideration, however, does not affect the finality of this Order. A reconsideration request must be received at this Commission within fifteen days of issuance and must include a detailed explanation of your reasons as to why reconsideration should be granted in conformity with 51 Pa. Code S2.38. The files in this case will remain confidential in accordance with Section 8(a) of the Ethics Act, 65 P.S. 408(a) during the fifteen day period and no one, including yourself, sunless the right to challenge this Order is waived, may violate confidentiality by releasing, discussing or circulating this Order. However, confidentiality does not preclude you from discussing this case with your attorney at law. Any person who violates 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, 65 P.S. 409(e). By Co issioo elena G. Hughes Chair STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 August 29, 1989 Mr. Rexford Stanford R.D. 43 Cambridge Springs, PA 16403 Re: Order No. 706 -R, File No. 86 -112 -C Dear Mr. Stanford: On August 28, 1989, the State Ethics Commission received your payment for reimbursing Richmond Township as required by Order No. 706 -R. We have forwarded your check No. 105 dated August 21, 1989 in the amount of $700 and check No. 5260 dated August 21, 1989 in the amount of $764.58 to Richmond Township. such. JJC /na This letter will be part of the Order and a public record as cc: Public Binder Sincerely, '•hn J."Contino Executive Director