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HomeMy WebLinkAbout713 LussiMr. Richard J. Lussi c/o Joseph F. Sklarosky, Esq. Suite 100, Park Building 400 Third Avenue Kingston, PA 18704 Re: 88- 041 -C Dear Mr. Lussi: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF TICE COMMISSION Order No. 713 Before: Helena G. Hughes, Chair G. Sieber Pancoast Dennis C. Harrington Michael J. Washo Date Decided: July 27, 1989' Date Mailed: July 28. 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 held. 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, Tax Collector in Plains Township, violated the following provisions of the Ethics Act (Act 170 of 1978), when you had the township pay for your health insurance premiums: 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. 5403(a). Mr. Richard J. Lussi Page 2 A. Findinas 1. You serve as the elected township tax collector and treasurer for Plains Township, Luzerne County, Pennsylvania. a. You have served in this position since January, 1982. 2. Plains Township provides for health and medical insurance for township employees through a group policy. a. Plains Township Municipal employees' health /medical insurance has been obtained through Blue Cross of Northeastern Pennsylvania, Wilkes - Barre, Pennsylvania. b. The insurance coverage for Plains Township includes Major Medical coverage, Blue Shield, and Blue Cross. c. The Plains Township policy group number is 14222. 3. Plains Township, Luzerne County, Pennsylvania, is a township the first class. 4. Invoices of Blue Cross of Northeastern Pennsylvania to Plains Township regarding medical /health insurance coverage for Richard Lussi, identification number 206304603 indicate the following regarding premium payments made by the township during the period January, 1987 through and including February, 1989: Date Maior Med. Blue Shield Blue Cross Total 01/01/87 $13.20 $53.26 $91.15 $157.61 02/01/87 $13.20 $66.60 $91.15 $170.95 03/01/87 $13.20 $66.60 $91.15 $170.95 04/01/87 $13.20 $66.60 $91.15 $170.95 05/01/87 $13.20 $66.60 $91.15 $170.95 06/01/87 $13.20 $66.60 $91.15 $170.95 07/01/87 $13.20 $66.60 $75.95 $155.75 08/01/87 $13.20 $66.60 $75.95 $155.75 09/01/87 $13.20 $66.60 $75.95 $155.75 10/02/87 $13.20 $66.60 $91.75 $170.95 11/01/87 $13.20 $66.60 $91.15 $170.95 12/01/87 $13.20 $66.60 $91.15 $170.95 01/01/88 $17.80 $79.80 $105.30 $202.90 02/01/88 $17.80 $105.80 $105.30 $202.90 03/01/88 $17.80 $ 79.80 $105.30 $202.90 Mr. Richard J. Lussi Page 3 Date Ma or Med. Blue Shield Blue Cross Total 04/01/88 $17.80 $ 79.80 $105.30 $202.90 05/01/88 $17.80 $ 79.80 $105.30 $202.90 06/01/88 $17.80 $ 79.80 $105.30 $202.90 07/01/88 $17.80 $ 79.80 $105.30 $202.90 08/01/88 $17.80 $ 79.80 $105.30 $202.90 09/01/88 $17.80 $ 92.85 $105.30 $215.95 10/01/88 $17.80 $ 92.85 $105.30 $215.95 11/01/88 $17.80 $ 92.85 $105.30 $215.95 12/01/88 $17.80 $ 92.85 $105.30 $215.95 01/01/89 $24.05 $ 92.85 $125.35 $242.25 02/01/89 $24.05 $ 92.85 $125.35 $242.25 Total: $4,963.96 5. Records of Plains Township indicate that you made payments to the Township for reimbursement of your medical /health insurance coverage for the period August, 1988 through and including February 19, 1989. a. The total amount of reimbursement made by you to the township for this coverage was $1,551.20. b. The total amount paid by Plains Township for insurance coverage provided to you that was not reimbursed to the township was $3,412.76. 6. James McGrath provided the following testimony: a. As a Special Investigator for the Commission, he performed the investigation in this case. b. He reviewed the township minutes and could find no approval for the insurance benefits you received. c. In listening to a tape of the January 12, 1989 township meeting, he heard the following: a discussion on the propriety of (your) insurance coverage; you introduced yourself as the subject of the inquiry of such coverage; you stated that Mr. Fanelli came to your office (about coverage) followed by a faint response of "yes" or "yeah;" you said that (coverage) was mentioned and offered to you because you were a full -time employee and no one from the township disputed that. 7. Patti Sluhocki provided the following information in relation to this situation: Mr. Richard J. Lussi Page 4 a. She serves as clerk to the Plains Township Board of Commissioners. b. Commissioners Berrini, Parada, and Fanelli were members of the Finance Committee at that time. c. Mr. Lussi received and filled out the application form and his name was then added to the list of township employees covered by the medical /health insurance plan. d. Mr. Lussi received coverage at the township's expense from January, 1987 until July of 1988 at which time he began, to reimburse the township for this coverage. e. Patti Sluhocki testified as follows: (1) Part of her duties as township clerk involved adding employees to various insurance plans. (2) She added your name to coverage but only after receiving permission from either Mr. Berrini or Mr. Fanelli. (3) The township commissioners approve employee benefits. (4) You did not approve these benefits for yourself. 8. Art Fanelli provided the following information in relation to the instant situation: a. He served as a Township Commissioner for Plains Township, Luzerne County, Pennsylvania. b. Mr. Fanelli, thereafter, advised Mr. Lussi that he didn't have a problem with him receiving the coverage as long as it was legal. c. The following testimony was given by Art Fanelli: (1) The Finance Committee on which he served would deal with all budgetary matters. (2) Matters recommended by the Finance Committee would be sent to the Board of Commissioners for approval. (3) He had a discussion with you regarding insurance coverage. He told you that he had no problem with the township providing coverage if you would reimburse; however, you wanted the township to pick up the Mr. Richard J. Lussi Page 5 coverage because you were a township employee. He responded that he would have no qualms if the coverage was legal. (4) You did not have the power to put yourself on the plan. (5) He was unaware that the Finance Committee approved insurance coverage for you. (6) It is possible that Patty Sluhocki contacted him and he gave permission for township insurance coverage on your behalf. 9. Benjamin Berrini provided the following information in relation to the instant situation: a. He served as a township commissioner for Plains Township, Luzerne County. b. He no longer serves in this capacity. c. He was a member of the Finance Committee during 1986 and 1987. d. Benjamin Berrini gave the following testimony: (1) The Finance Committee, on which he served, made recommendations to the Board of Commissioners regarding inclusion in the township insurance plan. (2) He did not recall that the Finance Committee discussed or recommended insurance coverage for you. The compensation package (for tax collector) was in existence when he came on the board and was continued in place. (4) He was not aware that anyone on the Finance Committee approved coverage. 10. Joseph Parade provided the following information in relation to the instant situation: (3) a. He has served as a township commissioner for Plains Township, Luzerne County for approximately sixteen years. b. The following testimony was provided by Joseph Parada: Mr. Richard J. Lussi Page 6 (1) He served on the Finance Committee which would deal with expenditures for insurance benefits. (2) Coverage for non union employees would have to be approved by the Board of Commissioners. (3) Your insurance coverage was not approved. (4) He did not tell Miss Sluhocki that your insurance coverage was approved. 11. Louise Pesotski testified as follows: a. She is the current Chairperson of the Board of Commissioners of Plains Township. b. At certain times, you performed other functions, such as collecting the garbage fees, selling garbage stickers, processing the mail and serving as a dispatcher. c. The Board was informed by the Finance Committee that they would give you coverage rather than a pay increase for the extra duties you performed for the township. 12. You provided the following information in relation to this situation: a. You were elected to the position of Township Tax Collector /Treasurer in November of 1981 and took office in January of 1982. b. Prior to assuming office with the township, you maintained your own Blue Cross /Blue Shield coverage in a separate plan. c. You began to received Blue Cross /Blue Shield coverage at the township's expense in January, 1987 and it continued until August of 1988 when you began to pay the township for the cost of your coverage in relation to this program. d. You did not seek the coverage. e. You were approached by Township Commissioner, Art Fanelli, who told you that you were eligible for the coverage because you were a full -time treasurer. f. The coverage was then approved by the Board of Commissioners, Finance Committee, which included Mr. Fanelli and Commissioners Berrini and Parada. Mr. Richard J. Lussi Page 7 g. You do not believe that the coverage was approved at the regular meeting of the township commissioners but it may have come up during a caucus meeting. h. You believe that the coverage was appropriate because you were a full -time employee. i. Sometime during the middle of 1988, Mr. Parada and Mr. Fanelli raised the issue at the township meeting and advised that they did not think your receipt of this coverage was appropriate. . This issue arose again at the January, 1989 meeting and Mr. Fanelli, at that time, admitted that he offered the coverage to you. k. The Commissioners decided, at that time, that you should not have to reimburse the township for past coverage. 1. Although the coverage for you was not approved at a regular commissioner meeting, the Blue Cross /Blue Shield bills, with your name on the list, were approved for payment by the Commissioners during regular meetings. m. Your position pays you $1,700 as tax collector and treasurer for the township. n. You are also serving as the tax collector for the county and school board and you do not receive Blue Cross /Blue Shield benefits in that position. o. You gave the following testimony: (1) Mr. Fanelli came to your office and advised that you could get the insurance benefits because you were a full -time employee. (2) Pat Sluhocki called and advised that the Finance Committee had approved the coverage. (3) In the summer of 1988, you received a phone call from Auditor Bonita who stated that the legality of your insurance coverage was being studied. (4) In September, you paid for your own coverage. (5) You had double insurance coverage because your wife continued your own Blue Cross /Blue Shield plan. i Mr. Richard J. Lussi Page 8 (6) At the January 12, 1989 meeting, you directed a question to Mr. Fanelli as to whether he came to your office and offered the coverage; Mr. Fanelli responded that he did so. 13. Minutes of the Plains Township Board of Commissioner's meeting for January 12, 1989 indicate the following regarding the instant situation: a. All Commissioners were present except Mary Conway. b. Under category of old business, Commissioner Parada indicated that at the last meeting, it was mentioned that a motion had been made in 1986 and presented to the board of Commissioners regarding a certain individual's insurance coverage. A request was made at the last meeting for the secretary to determine if such was correct. c. Secretary Sobol stated that she reviewed the minutes for 1986 and could find no motion regarding that issue. d. It was stated that the board had erred at the last meeting where they made a motion that the individual involved would not have to pay back the insurance premiums until such time as such was ordered to be done by an organization. e. Mention is made of newspaper articles and a decision that had been issued by the State Ethics Commission regarding a similar matter. f. Commissioner Parada stated that the Board should go on record directing the person involved to pay back the insurance funds that had been expended by the township. g. It was also suggested that after a certain time, interest be paid also as part of the restitution. 14. A tape of the January 12, 1989 meeting of the board of township commissioners for Plains Township indicates the following events occurred in relation to the instant situation: a. Commissioner Parada introduces the issue of insurance coverage and the potential that the board had reviewed the motion for permission of a certain individual to participate in the insurance program and that he had requested the township secretary to review the minutes of past commission meetings to determine if the board had indeed considered this issue. Mr. Richard J. Lussi Page _ 9 f. Another Commissioner then states that legal documentation should be provided to the board indicating that the individual's receipt of these insurance benefits was indeed improper. Mr. Parada states that his information that such is not appropriate was noted in a newspaper article indicating that the Ethics Commission had so ruled. h. Discussion then occurs regarding the solicitor's opinion in this matter. It is noted that the solicitor, in May of that year, had indicated that the township should seek recovery of these funds based upon an analysis of State Ethics Commission opinions, Township Code, and the State Ethics Act. The solicitor notes that he was unable to find a State Ethics Commission opinion exactly on point, but he did review an analogous opinion relating to a borough tax collector. j b. Township Secretary, Eleanor Sobol, reports that she read through the minutes of 1986 and was unable to find a motion to that effect. c. Parada then states that even if a motion had been made and approved by the board allowing the individual to participate in the township's insurance program, state law supersedes local government laws and the board had erred in the previous meeting when a motion was made that the individual involved did not have to repay to the township, funds expended on his behalf for participation in the insurance program unless he was ordered to do so by some other organization. d. Mr. Parada indicates his belief be required to make restitution expenditure of these funds. e. Parada also states that after a will also suggest that interest individual. g. that the individual should for the township's certain period of time, he should be paid by that i. The Commissioners then discussed the possibility of writing a letter to the Ethics Commission seeking further clarification of the issue. . Several Commissioners opined that proceeding in that manner would be better than continuing to discuss this issue among themselves for an indefinite period of time. t Mr. Richard J. Lussi Page 10 k. The Commissioners discuss at what point in time permission was given to the involved individual to receive these benefits. Mr. Parada indicates that he is unaware of when such was done. He indicated that he was unaware if it was done at a regular meeting or at a caucus meeting. He further indicates that he was not a part of authorizing these benefits for this individual. 1. Richard Lussi identifies himself and indicates that he is the individual about whom the Commissioners are speaking. He further indicates that he contacted a local state representative in order to seek an opinion as to whether his receipt of the insurance benefits had been appropriate. He indicated that he contacted the state representative because that particular representative was a member of the Local Government Committee. He further indicates that the state representative placed him in contact with an individual at the State level who is familiar with these situations. The individual questioned him as to whether he had voted this benefit for himself or whether it was given to him by other individuals. He advised, that he did not vote this benefit for himself but that the township commissioners had approved it for him. m. At this time, Lussi states to Arthur Fanelli that he (Fanelli) was in Lussi's office and mentioned insurance benefits to him because he was a full -time employee. At this time, Lussi specifically directed that comment to Mr. Fanelli and Mr. Fanelli responded yes. n. Lussi continues that he was offered this benefit because he was a full -time employee. o. He further stated, directly to Mr. Parada, that at the time this was transacted, he had been on the board of Commissioners and he came in his (Lussi's) office and stated that because he was a full -time employee, he was entitled to this coverage. Lussi further states that Parada said we think you should have blue cross and blue shield." Lussi further states "you gave this to me." He stated that he did not vote for this benefit or take it on his own accord. He further notes that the Commissioners paid the Blue Cross and Blue Shield bills for this coverage for a period of time and never questioned this item. p. Parada denies Lussi's statements that he gave it to him and indicates that he was unaware of this benefit. Mr. Richard J. Lussi Page 11 The Commissioners then discussed the possibility of proceeding to the State Ethics Commission for a determination on this issue. The solicitor then points out the distinctions to the Commissioners regarding the procedures involved in seeking an advisory opinion and those involved in filing a sworn complaint. The solicitor indicates that the Commission will not issue an advisory opinion regarding conduct that has already occurred. B. Discussion: As the elected township tax collector /treasurer for Plains Township, Luzerne County, you are a "public official" as that term is defined under the Ethics Act and regulations of the State Ethics Commission. 65 P.S. Section 401; 51 Pa. S1.1. As such, your conduct is subject to the provisions of the Ethics Act and the restrictions therein are applicable to you. Initially, it is noted that Section 5 of Act 9 of June 26, 1989 provides, in part, as follows: "This amendatory act shall not apply to violations committed prior to the effective date of this act, and cause of action initiated for such violations shall be governed by the prior law, which is continued in effect for that purpose as if this act were not in force. For the purposes of this section, a violation was committed prior to the effective date of this act if any elements of the violation occurred prior thereto." q. Since the occurrences in this case transpired prior to the effective date of Act 9 (June 26, 1989), we must apply the provisions of Act 170 of October 4, 1978, P.L. 883 to determine whether the Ethics Act was violated. Under Section 3(a), 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. 412 -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 Mr. Richard J. Lussi Page 12 public official /employee may not use the status or position of public office for his own personal advantage; Huff, Opinion 84 -015. In order to determine whether you have violated Section 3(a) of the Ethics Act quoted above, it is necessary to review your conduct in the context of the restrictions set forth in Section 3(a). In the instant matter, you received Major Medical, Blue Cross /Shield insurance coverage at the expense of Plains Township between the period of January, 1987 through and including February of 1989. However, you reimbursed Plains Township for the insurance coverage for the period between August, 1988 through and including February 19, 1989. Testimony reflects that the Plains Township clerk placed you on the insurance plan but did so only after conferring with and obtaining the approval from one of the Township Commissioners who served on the Finance Committee. In applying Section 3(a) of the Ethics Act to the above facts, it is necessary to review each of the component elements of Section 3(a) in order to determine whether a violation of that provision of law has occurred. Having established that you are a public official, we now must determine whether the receipt of the paid medical benefits is a financial gain and whether such gain is authorized as part of the compensation provided for by law. There is no question that the receipt of township paid medical benefits is a financial gain. See McCutcheon,, supra, Svnoski v. Hazle Township, Pa. Commw. Ct , 500 A.2d 1282 (1985). Further, there is no provision in the First Class Township Code which authorizes township paid insurance benefits for the tax collector /treasurer. Thus, the township paid insurance benefits which you received was a financial gain other than compensation provided for by law. However, although you are not entitled to these benefits, it is clear in this case that you have not engaged in the requisite "use of office" in order to obtain financial gain. The testimony establishes that you did not obtain these benefits for yourself; rather, you were put on the plan after the clerk conferred with one of the members of the board of township commissioners who was also a member of the Finance Committee. Accordingly, you did not violate Section 3(a) of the Ethics Act when you received these township paid insurance benefits. A postscript is necessary so that our decision in this case is not misconstrued. We are not holding that you are entitled to receive township paid insurance benefits; clearly, you are not so entitled under the above analysis. In fact, this Commission has already opined that a borough tax collector is not entitled to receive borough paid insurance benefits but could reimburse the borough for his participation in the group plan. Domalakas, Opinion 85 -010. Our decision in this case is strictly limited to a determination that there was no showing of use of office on your part to obtain these Mr. Richard J. Lussi Page 13 benefits. Accordingly, you did not violate Section 3(a) of the Ethics Act in this case. C. Conclusion and Order: 1. As the Tax Collector /Treasurer for Plains Township, you are a public official subject to the provisions of the Ethics Act. 2. You did not violate Section 3(a) of the Ethics Act when you received township paid insurance benefits in that there was no use of office on your part to obtain such financial gain which is other than compensation provided by law. This Order is final and will be made available as a public 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 52.38. 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, unless 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). Commission elena G. Hughes Chair G. Sieber Pancoast did not participate in this matter.