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