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HomeMy WebLinkAbout716 KovatchMr. John Kovatch P.O. Box 307 Meadowlands, PA 15347 Re: 88 -056 -C Dear Mr. Kovatch: STATE ETHICS COMMISSION 3os FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Order No. 716 Before: Helena G. Hughes, Chair G. Sieber Pancoast Dennis C. Harrington Michael J. Washo Date Decided: Julv 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 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 Supervisor for Chartiers Township, Washington County, violated the following provisions of the Ethics Act (Act 170 of 1978) and State Ethics Commission regulations, when you voted to hire and set salaries of members of your immediate family for paid positions with the township, received health insurance and pension insurance without auditor approval; and failed to file Statements of Financial Interests for 1983, 1984, 1985 and 1986: 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 Mr. John Kovatch Page 2 compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. S403(a). Section 4. Statement of financial interests required to be filed. (a) Each public employee employed by the Commonwealth shall file a statement of financial interests for the preceding calendar year with the department, agency or bureau in which he is employed no later than May 1, of each year that he holds such a position and of the year after he leaves such a position. Any other public employee shall file a statement of financial interests with the governing authority of the political subdivision by which he is employed no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. 65 P.S. §404(a). S4.4. Incumbent and former public officials. (a) Incumbent officials of the Commonwealth's executive, legislative, and judicial branches and other statewide offices who are not candidates shall file their Statement of Financial Interests with the Commission and a copy with the agency in which they hold office by May 1 of each year in which they hold office. 51 Pa. Code S4.4(a). A. Findings 1. You have served as a Supervisor for Chartiers Township, a Second Class Township, Washington County, since 1976. 2. Your wife, Dolores Kovatch, served as Chartiers Township custodian from November, 1976 to June, 1987. 3. Minutes of the meetings of the Chartiers Township Supervisors disclosed the following regarding the creation of a janitorial position, compensation and selection for that position: a. November 24, 1976: Motion Elia, second by Kovatch to establish a janitor position and set the rate of pay at $100 /month. Roll call vote: Kovatch, Elia, Kusky all in favor. Mr. John Kovatch Page 3 Motion Elia, second by Kusky to hire Mrs. Dolores Kovatch as janitor. Roll call vote: Elia, Kusky, Kovatch, all in favor. b. January 3, 1977: Reorganization Meeting. Motion Elia, second by Kusky to set the salary of the janitor at $100 per month to be paid bi- monthly. Roll call vote: Elia, Kusky, Kovatch all in favor. Motion Elia, second Kusky, to appoint Dolores Kovatch as janitor for 1977. Roll call vote: Elia, Kusky, Kovatch, all in favor. c. January 3, 1978: Reorganizational Meeting: Motion to set the salary of custodian at $1,290 per year made by Kusky, seconded by Mullins. Motion carried by majority vote with Kovatch voting no. Motion to appoint Dolores Kovatch as custodian made by Mullins, seconded by Kusky. Motion carried by majority vote with Kovatch voting no. d. January 2, 1979. Reorganizational Meeting: Motion made by Mullins, seconded by Kusky to set salary of custodian at $1,386 per year. Motion carried by majority vote with Kovatch abstaining. Motion by Kusky, seconded by Mullins, to appoint Dolores Kovatch as custodian. Motion carried by majority vote with Kovatch abstaining. e. January 7, 1980. Reorganizational meeting. Motion to table setting the salary of custodian and the appointment of custodian made by Kusky, seconded by Casper. Motion carried by majority vote with Kovatch abstaining. f. February 1, 1980: The appointment of custodian postponed at this time, to continue with service presently have. No call vote taken. All supervisors (Kusky, Casper, Kovatch), present. g. January 5, 1981. Reorganizational meeting. Motion by Casper, seconded by Kusky to set salary for custodian at $6.50 per hour. All in favor, Kusky, Casper, Kovatch. Motion by Kusky, seconded by Casper to appoint Dolores Kovatch as custodian. All in favor, Kusky, Casper, Kovatch. Mr. John Kovatch Page 4 h. January 4, 1982: Reorganizational meeting. Motion made by Casper, seconded by Kovatch to set the salary for custodian at an increase for the year with provisions of possible 2% increase July through December 31, 1982. $6.85 per day January through June 30, 1982, $6.99 July through December 31, 1982. Motion made by Casper, seconded by Kusky to appoint Dolores Kovatch as custodian. Motion carried by majority vote with Kovatch abstaining. i. January 3, 1983: Reorganizational meeting. Motion Casper, second by Kusky to set the salary of custodian, as follows: $6.99 per day January through June, $7.34 per day July through December. All in favor: Kusky, Casper, Kovatch. Motion by Casper, seconded by Kusky to appoint Dolores Kovatch as custodian. All in favor - Kovatch, Casper and Kusky. January 4, 1984 - reorganizational meeting. Motion by Casper to set salary of custodian at $7.34 per day, seconded by Kovatch. All in favor - Kovatch, Casper, Kusky. Motion made by Casper, to appoint Dolores Kovatch as custodian seconded by Kovatch. All in favor - Kovatch, Casper, Kusky. k. January 7, 1985: Reorganizational meeting - Motion Casper, second by Kovatch to set the salary for custodian at $7.89 every two weeks which reflects a 7h% increase. All in favor: Casper, Kovatch. (Kusky absent). Motion Casper to reappoint Dolores Kovatch as custodian. Seconded by Kovatch. All in favor Casper, Kovatch. 1. January, 1986: Reorganizational meeting. Motion by Casper, seconded by Kusky to set salary for custodian at $8.43 every two weeks which reflects a 7% increase. Motion carried. j• Roll Call: Casper, Kusky - yes; Kovatch abstained. Mr. John Kovatch Page 5 Motion by Casper, seconded by Kusky to appoint Dolores Kovatch as custodian. Motion carried. Roll Call: Casper, Kusky - yes; Kovatch abstained. m. January 5, 1987: Reorganizational meeting. Motion by Casper to set salary of custodian at $86.96 every two weeks, seconded by Casper. Motion carried. Roll Call: Casper and Kovatch - yes; Kusky abstained. Motion by Kovatch to appoint Dolores Kovatch as custodian, seconded by Casper. Motion carried. Roll Call: Casper and Kovatch - yes; Kusky abstained. n. June 16, 1987: A letter from State Ethics Commission on the hiring of relatives as township employees was discussed. Solicitor Liekar explained that the township must remove personnel from the payroll roster who were hired in violation of the Ethics Commission ruling. Casper made a motion to remove Dolores Kovatch from the payroll roster as a township employee. Seconded by Kusky. Vote: Casper and Kusky - yes; Kovatch abstained. Casper made a motion to rehire Dolores Kovatch as the township custodian at the rate established in the January, 1987 organizational meeting. 4. Chartiers Township payroll records disclosed the following regarding salaries paid to your wife: a. 1978: 1979: 1980: 1981: 1982: 1983: 1984: 1985: 1986: 1987: Motion died for lack of a second. $1,240.25 $1,382.86 $1,485.83 $1,682.30 $1,865.60 $1,793.00 $1,908.40 $2,051.66 $2,195.18 $1.069.61 to June 21, 1987 Mr. John Kovatch Page 6 Total: $16,674.69 b. Payroll records for 1976 and 1977 were not available. 5. Your son, Keith Kovach, thirty -three (33) years old, male with a date of birth of June 21, 1955, worked as a part -time employee for the Chartiers Township road crew. 6. Chartiers Township payroll records disclosed that your son was paid by the township from 1978 through 1987 as follows: a. 1978: $4,537.15 $4.35/hr 1979: 1980: 1981: $2,840.51 $5.75/hr. 1982: $5,160.82 $5.75/hr. through June $6.18 /hr. after June 1983: $6,173.58 $6.18 /hr. through June $6.49/hr. after June 1984: $7,927.96 1985: $1,565.27 1986: $2,786.34 1987: - -- Total: $30,993.58 7. Minutes of the Chartiers Township Supervisors from 1978 through 1983 confirmed that Keith Kovatch's hiring as a part -time employee was not made at a public meeting. Other minutes of meetings disclosed the following: a. January 11, 1984: Kovatch pointed out that no extras were appointed for road work when need arises. Motion by Kovatch to appoint Keith Kovatch, Jonson, Bazzoli, Altieri Sr., Altieri. Seconded by Casper. All in Favor - Kovatch, Casper, Kusky. b. January 7, 1985: Motion made by Casper to appoint full -time road maintenance personnel and Keith Kovatch as extra road maintenance. Motion seconded by Kovatch. All in favor, Kovatch, Casper ( Kusky absent). c. January 5, 1987: Motion made by Kovatch, seconded by Casper to appoint "emergency extras" (with class 3 drivers license) as follows: Keith Kovatch, Emil Bazzoli, Mickey Altieri, Herman Almo, Donnie Casper, Frank Przystup, Dick Johnson. Roll call vote: Casper, Kovatch - yes, Kusky, abstain. Mt. John Kovatch Page 7 d. April 22, 1987: Citizen Comments. Various citizens were present to question the township's hiring practices. Donald Startzel, Municipal Authority member, asked the board how widespread is nepotism within the township, how many people working for the township are related to the Board of Supervisors. Mr. Kovatch said his son works for the township when needed, during the winter from 4:00 p.m. to 9:00 p.m., during the summer the same hours to operate the tractor mower. Minutes reflect that the issue was argued in depth with residents and laid -off extras wanting an answer to the hiring practices. e. May 12, 1987, Old business. Hiring relatives as township employees. Solicitor Liekar received an answer from the Ethics Commission regarding hiring relatives as Township employees. Mr. Casper read the answer to the audience. Liekar recommended that copies be posted on the bulletin boards in the township building. Liekar recommended that the Supervisors take some action on the letter received from the Ethics Commission at the next meeting. Casper indicated a change in their voting will take place at that meeting. f. June 10, 1987, Old business. Letter from State Ethics Commission. Solicitor Liekar explained that the township must remove personnel from the payroll roster who were hired in violation of the Ethics Commission. g. January 4, 1988: Appointment of "Emergency Extras" - A discussion took place on hiring relatives. The Ethics Commission ruling was explained that as long as the employee is a non - dependent relation of the board member, there is no problem. Kovatch made a motion to appoint Keith Rovatch as an emergency extra. Motion died for lack of a second. 8. By letter dated May 13, 1987, Township Solicitor, James Liekar, requested an opinion from the State Ethics Commission regarding the hiring of relatives as township employees. The letter asked four questions as follows: Mr. John Rovatch Page 8 1. May a township supervisor vote to hire his son, a minor dependant member of his immediate family, as a township employee when the job application of the supervisor's son is considered together with other job applicants; the son is equally qualified with other applicants and does not contribute to the family's support. 2. May a township supervisor vote to hire his son who is not a minor dependant child, nor a member of his immediate family, as a township employee when the job application of the supervisor's son is considered together with other job applicants; the son is equally qualified with other applicants and does not contribute to the family's support. 3. May a township supervisor vote to hire his spouse as a township employee, who is a member of his immediate family, who is considered with other job applicants for hire, is equally qualified and does contribute to the family's support. 4. With reference to the hiring of a spouse, under the same conditions contained in paragraph 3 hereinabove, except that the spouse does not contribute to the family's support. 9. Advice of Counsel No. 81 -580 was issued on May 21, 1987 by the State Ethics Commission, General Counsel. That advice concluded: a. Consistent with past opinions of this Commission and the provisions of the State Ethics Act, a public official may not participate in the hiring of a minor dependent child or a spouse residing in his household. Additionally, it would be the better practice for a public official to abstain from participating in the hiring of his adult children who are not within the definition of immediate family as set forth in the State Ethics Act. The hiring process should be conducted through an open and public process and all abstentions should be publicly noted and appropriately recorded. 10. Minutes of the Chartiers Township Board of Supervisors Meetings reflect the following regarding medical /hospitalization benefits: A. January 7, 1985: (1) Regarding insurance benefits: Motion by Casper, seconded by Kovatch to retain the same coverage as last year, as follows: Mr. John Kovatch Page 9 (2) ( (1) ( (3) Township will continue providing of benefits for Life Insurance, disability, and hospitalization insurance. This applies to full -time employees and Supervisors. Motion carried - Casper and Kovatch (Kusky absent). Motion by Casper to continue to extend hospitalization coverage to extra or full -time employees at the discretion of the Board when reasonable cause has been indicated that such is necessary. Seconded by Kovatch. All in favor - Casper and Kovatch ( Kusky absent). Supervisors appoint themselves Superintendents of the township road system, and shall be entitled to all benefits provided the employees of said township. Supervisors are encouraged to donate their time as much as possible within reason in the execution of their duties and specific duties related to Township matters. Motion by Casper. Seconded by Kovatch. All in favor - Casper and Kovatch (Kusky absent). B. January 5, 1987: Insurance benefit coverage: Motion by Casper, seconded by Kovatch to remain the same as last year -- township will continue coverage of benefits for life insurance, disability, and hospitalization insurance. This applies to full -time employees and supervisors. Motion carried. (No listing of any abstentions or no votes). Supervisors voted themselves Superintendents of the Township road system, and shall be entitled to any and all benefits provided to work on road so designated in the Second Class Township Code. Supervisors are encouraged to donate their time as much as possible within reason in the execution of their duties and specific duties related to Township matters. Motion by Kovatch, seconded by Kusky. (All in favor. Present Kovatch, Kusky, Casper). Compensation for supervisors attending township meetings under the new rule - Casper entitled to $100.00 per month. Mr. John Kovatch Page 10 (2) (3) (4) (5) Casper commented, since Kovatch was re- appointed as Supervisor he would be entitled to the new amount. Kovatch wished to go on record saying "I refuse to accept the new rate." Motion made by Casper that Kusky be paid on monthly basis, the sum of $166.67. Seconded by Kovatch. Motion carried. C. January 4, 1988: (1) Motion made by Kusky to continue insurance benefit coverage as in previous years. Motion died for lack of second. Kovatch felt that Supervisors are not entitled to hospitalization benefits. Kovatch made a motion to pay hospitalization benefits for all full -time employees (leave out supervisors). Motion died for lack of a second. Kovatch felt that if Kusky receives insurance, so should Casper. Casper made a motion for the township to continue coverage of benefits of life insurance, disability, hospitalization insurance, and dental for all full -time employees and Supervisors as permitted by law pending Auditor approval. Motion seconded by Kusky. Roll Call: Casper - yes, Kovatch - no, Kusky - yes. Motion carried. Motion to acknowledge the fact that the Supervisors of the Township of Chartiers will continue to act as Superintendents of the township road system and shall be entitled to any and all benefits provided to work on the roads so designated in the Second Class Township Code. All in favor. In a discussion regarding compensation, and punching time cards, it was stated that there will be no compensation for workshops. All in favor. Mr. John Kovatch Page 11 11. Chartiers Township Auditors meeting minutes reflect the following regarding compensation for township supervisors: a. 1/8/85 - Supervisors pay rate set at $5.77 per hour, for road work. Rate effective 1/1/85. Stipulation - if a rate increase is granted to the township employees during the year, the supervisors' rate may be adjusted to that of laborer /truck driver classification. b. 1/7/86 - Supervisors pay rate set at $6.17 per hour. Rate effective 1/1/86. Rate determined from the rate paid to laborer /truck driver. c. 1/6/87 - Supervisors pay rate set at $6.36 per hour. Rate effective 1/1/87. Rate determined from the rate paid to laborer /truck driver. d. 1/5/88 - Supervisors' pay rate set at $6.55 per hour. Rate effective 1/1/88. Rate determined from the rate paid laborer /truck driver. 12. Records of Chartiers Township contain a letter to the Supervisors from the Auditors in regard to their observations and recommendations on the completion of the 1987 audit report. In Finding No. 6 the auditors stated: a. They have questioned in past years, the paying by the township of hospitalization for the supervisors who are full -time employees of other organizations. b. They previously requested Casper to reimburse the township for the hospitalization benefits, and he had complied, even though he has not fully reimbursed the township to date. Mr. John Kovatch Page 12 c. The Ethics Commission has ruled on numerous occasions that if a Supervisor is not a full -time employee of the township, he should not qualify for benefits such as hospitalization, etc. d. Kusky has been receiving hospitalization benefits paid for by the township. e. They recommend that the township be reimbursed the amount of $2,579.99 for the year 1987, by Supervisor Kusky. 13. Records of Chartiers Township indicate that you participated in the township's expense in a life and disability insurance program. 14. This program was administered through the Trustees' Insurance Fund, Camp Hill, Pennsylvania. 15. Invoices from Trustee's Insurance Fund, 3001 Gettysburg Road, Camp Hill, Pennsylvania, 17011, reflecting annual payments made by the Township for your participation in the plan; Disability Life 12/14/84 $99.00 1/85 $93.42 12/16/85 99.00 7/15/85 93.42 12/15/86 99.00 7/15/86 93.42 12/15/87 99.00 7/15/87 82.96 16. Total annual Life and Disability premiums paid for Kovatch's participation: a. September, 1984 - September, 1985: Pro -rated April - August, 1985 at $7.79 /mth. $38.93 Disability at $99.00 /yr. Pro -rated April - December, 1985 at $8.25 /mth. $74.25 b. September, 1985 - September, 1986 at $93.42/yr. $93.42 Disability at $99.00 /yr. $99.00 c. September, 1986 — September, 1987 at $93.42/yr. $93.42 Disability at $99.00 /yr. $99.00 d. September, 1987 - September, 1988 at $82.96/yr. $82.96 Disability at $99.00/yr. Pro - rated January - August, 1988 $66.40 Total: $647.38 Kr. John Kovatch Page 13 Disability is paid yearly January - December. Life is paid yearly September - August. The life plan for Kovatch is paid through August 31, 1988. 17. Your coverage was terminated effective September 1, 1988. Township records confirm that the township received a $32.40 reimbursement from Trustee's for the period September through December, 1988. 18. You participated in a pension program into which the township contributed (77 %) of your pay. a. Township pension plan is handled by the HDH Group, Inc., One Oxford Centre Suite 4400, Pittsburgh, Pennsylvania, 15219, (412)- 391 -7300. The plan was formerly known as Markitan until HDH took over. Pension funds were formerly deposited with Slovenian Savings & Loan Association, recently changed to Hartford on recommendation from HDH. b. Policy No. AN139131. Issue date January 1, 1974. 19. Pension contributions by the Township, as taken from the payroll summaries, April, 1985 through December, 1987, show the following payments made on your behalf (7% of each pay): Period Endina Total Pav Township Contri. (7 %) Check No. a. 4/28/85 $ 75.00 $5.25 5/12/85 138.48 9.69 5/26/85 50.00 3.50 7/7/85 81.74 5.72 6554 7/21/85 96.65 6.76 6561 8/4/85 148.09 10.37 6623 8/18/85 25.97 1.82 6659 9/1/85 104.82 7.34 6688 10/3/85 96.16 6.73 6735 10/13/85 46.16 3.23 6765 10/27/85 188.48 13.19 6789 11/24/85 44.72 3.13 141 12/12/85 100.94 7.07 102 Total: 1985 $1,197.21 $83.80 b. 1/5/86 $105.85 $7.41 223 1/19/86 12.34 .86 2/2/86 75.00 5.25 3/2/86 50.00 3.50 3/30/86 50.00 3.50 344 4/27/86 188.48 13.19 397 Mr. John Kovatch Page 14 6/8/86 50.00 3.50 479 7/6/86 80.85 5.66 7/20/86 49.36 3.45 8/3/86 50.00 3.50 8/31/86 50.00 3.50 9/28/86 50.00 3.50 719 10/26/86 198.08 13.86 780 12/7/86 120.96 8.47 Total: 1986 $1,130.92 $79.15 c. 1/4/87 $ 50.00 $3.50 913 undated 106.80 $7.48 undated 50.00 3.50 4/2/87 50.00 3.50 1094 4/30/87 265.80 18.61 6/7/87 50.00 3.50 1240 7/5/87 50.00 3.50 1293 undated 100.00 7.00 undated 78.18 5.47 undated 50.00 3.50 1518 undated 177.64 12.43 12/10/87 110.43 7.73 undated 11-11k 2.23 Total: 1987 $1,170.65 $81.95 20. Total contributions equalled $244.90. a. Contributions were discontinued at the end of December, 1987. b. On July 12, 1989, Secretary Rita Dettrick confirmed that the amount of Kovatch's pension totalling $11,857.81 was returned to the township which included the township's contributions of $244.90 made in 1986 and 1987. 21. The township expended the following amount, as to which you have not made reimbursement, for your benefits from April, 1985 until they were terminated. a. Life and Disability $614.98 22. According to the Township auditors, they never approved hospitalization or insurance benefits for the supervisors. a. One township auditor believes that the supervisors should be entitled to participate in the program. Mr. John Kovatch Page 15 b. One township auditor stated that she was not aware that the supervisors were receiving insurance benefits at the township's expense until 1987. 23. Township Solicitor, James Liekar, stated the following: a. He did not advise the Supervisors if they did not ask. b. He was asked to draw up guidelines for hiring practices which he did. They have not been adopted yet. c. He requested that the Commission consider the financial loss to the township since Mrs. Kovatch was terminated. The township now pays twice as much. d. Only in 1985 did Kovatch cast the deciding vote to hire his wife. 24. You provided the following information to investigators of the State Ethics Commission: a. You have served as a Chartiers Township Supervisor since 1976. b. You stated that your son, Keith Kovatch, was over the age of eighteen when he was hired as an emergency extra. Your son worked many hours for nothing because he liked the work. c. When your wife, Dolores, first started working at the Township, she supplied all the necessary cleaning materials and took her own vacuum cleaner. It cost you money to have her work at the township building as the janitor. Eventually, the former Secretary convinced your wife to turn in her receipts for the cleaning supplies that she was using. d. You did not want your wife to work for the township, but Casper and Kusky said that she did such a good job, and they kept voting her into the position. Before your wife was hired to the position of janitor of the township, she cleaned the building for years, free. e. You did vote for your wife, but did not know that there was anything wrong with doing so. Other people were considered for the position, but when they found out what it paid and that there were no benefits, they weren't interested. Kusky brought people in to be considered for the position, but none wanted it. Xt. John Kovatch Page 16 f. In 1980, the motion to hire and set wages for the janitor's position was tabled. One month later, the motion was to leave things as they are. This was the time that Kusky brought in some people to look at the job. You did not realize that it was wrong to vote on the motion to keep things as they were, even though it retained your wife for janitor as in 1979. In 1982, when you abstained from voting for the position and the salary for the janitor, you seconded and were probably mad at her for supplying her own sweeper to the township. The township purchased their own sweeper in 1984. It cost you money all these years because your wife didn't turn in her expenses. h. In 1987, you voted for your wife because Kusky wanted his son on, and you wouldn't vote for him. You argued with Casper and Kusky about hiring the secretary /treasurer because they did not advertise the position. You did not know it was wrong to vote for your wife at this time. Kusky abstained from voting for his wife, so he voted for her. i. If you had known from the beginning that it was illegal to vote to hire your wife it would never have happened. She only took the job because no one else would take it. The township has now hired A.R.C. (Association for Retarded Citizens) , , after advertising for the position. You wouldn't do anything wrong intentionally. You have good insurance with Jessop Steel where you are employed. You knew you were on the discussions that the insurance was illegal around early 1987, when Secretary Rita Dietrich started. k. You believed that the insurance policies were cancelled around 1987. If you do something wrong, you're wrong; when you try to do right and get kicked in the pants, it isn't fair. g. j• 1. You do not recall anyone specifically questioning the life /disability and pension plans and that you do not dispute the figures determined in the investigation. m. You did not file in the years 1983, 1984, 1985, and 1986, because you believed that if nothing had changed in the information you had previously filed, then you didn't have to file again. You filed in 1987 because you were reminded to do so, probably by the secretary. Mr. John Kovatch Page 17 25. Financial disclosure statements on file with the Chartiers Township secretary confirm that you filed Statements of Financial Interests only for the 1986 calendar year on March 12, 1987 and the 1987 calendar year on January 5, 1988. No forms are on file for you for the 1982, 1983, 1984 and 1985 calendar years. B. Discussion: As a supervisor in Chartiers Township, you are a public official subject to the provisions of the Ethics Act. 65 P.S. S402; Sowers Opinion 80 -050; Szvmanowski, Order No. 539. 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." 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) of the Ethics Act quoted above, it is specifically provided that a public official may not use his public office or confidential information to obtain a financial gain for himself other than compensation provided for by law. The compensation which is allowed for a supervisor is strictly regulated by statutory and decisional law. Under Section 3(a) of the Ethics Act, 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. Hazel Township, 93 Pa. Commw. 168, 500 A.2d 1282, (1985); In re: Appeal of the Auditors Report of Muncv Creek Township, Pa. Commw. Ct. , 520 A.2d 1241, Mr. John Kovatch Page 18 (1987); Hunt, Order No. 348 -R. The foregoing principle was recently reaffirmed by Pennsylvania Commonwealth Court in Yocabet v. State Ethics Commission, 109 Pa. Comm. 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 of 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 gain. Any benefits received other than as provided for above, would constitute a financial gain obtained in violation of the State Ethics Act. See McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529, 466 A.2d 283, (1983); Conrad v. Exeter Township, 27 D & C 3d 253, (1983). These principles 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). Further, the right to sue for the restitution of the financial gain obtained in violation of the Ethics Act has been upheld by Commonwealth Court in Fee v. Commonwealth of Pennsylvania and Township of Union Pa. Commw. Ct. , 540 A.2d 1385 (1988). In the instant matter, you were not a full -time or part-time employee (supervisor) of the township but you received health and pension insurance at township expense. In a January 7, 1985 meeting of the Board of Supervisors, you seconded and voted in favor of a motion to continue the insurance coverage for you and the other supervisors. Likewise, in a January 5, 1987 board meeting, you seconded and voted in favor of a motion to extend coverage of these benefits to the supervisors. The Supervisors voted themselves Superintendents which appears to be contrary to the Second Class Township Code, 53 P.S. S65514 which only permits the appointment of one superintendent. In a January 4, 1988 meeting a motion was made and approved to continue insurance coverage subject to auditor approval. You voted against the foregoing motion. The minutes of the auditors of Chartiers Township reflect that they never approved insurance benefits for the supervisors for the years 1985 through 1988. Additionally, even if the auditors had approved such insurance benefits, their actions would -be to no avail since you were not a working supervisor. Mr. John Kovatch Page 19 Although it appears that you may have been receiving insurance benefits for most if not all of the time that you have been a supervisors since 1974, Act No. 1988 -41 in Section 1(b)(2) provides amnesty for any benefits received between January 1, 1959 and March 31, 1985. Thus, even though Section 3(a) of the Ethics Act would be implicated for any benefits you received during the amnesty period, no penalty may be assessed against you for the benefits you received between January 1, 1959 and March 31, 1985. However, in this case, you have received $614.98 in township paid insurance benefits after the end of the amnesty period. Your receipt of these benefits at township expense violated Section 3(a) of the Ethics Act; you must return this unlawful gain to your township. McCutcheon and Yocabet, supra. You are hereby directed to forward a check to the State Ethics Commission in the amount of $614.98 payable to Chartiers Township within thirty (30) days of the date of this order or this matter will be referred to the appropriate law enforcement authority. Turning to the allegation concerning the hiring of your son to a part -time position with the township road department and your wife as custodian, it is noted that you did vote in favor of the appointments of your son and wife in meetings of the Board of Supervisors. In particular, you voted on November 24, 1976 and seconded a motion and voted in favor of the appointment of your wife on January 3, 1977. However, these actions predate the Ethics Act and do not constitute violations. However, in January 5, 1981, you voted to set the salary of the custodian and then voted in favor of your wife's appointment. You took similar action in the January 3, 1983, January 7, 1985 and January, 1986 and January 5, 1987 meetings of the Board of Supervisors. As to your son, you made and voted in favor of a motion on January 11, 1984 to hire your son. Likewise, in January 7, 1985, you seconded and voted in favor of a motion for hiring your son as an extra. You made the motion and voted in favor of the appointment of your son as an emergency extra employee in the January 5, 1987 meeting. Since it is established that you voted in favor of a motion to appoint members of your family, the remaining question to be resolved is whether your wife and your son are members of your immediate family as that term is defined in the under the Ethics Act: "Immediate family" is defined under Section 2 of the Ethics Act as follows: Mr. John Kovatch Page 20 Section 2. Definitions. "Immediate family." A spouse residing in the person's household and minor dependent children. 65 P.S. S402. Since your son was 33 years of age at the time of his appointment, he is not a member of your "immediate family" under the Ethics Act. Accordingly, you did not violate Section 3(a) of the Ethics Act when you voted for your son. Modrovich Order 585. Although this Commission finds that there is no violation as to this allegation, the foregoing is not to be construed as an acceptance of your action. Section 1 of the Ethics Act recites that public office is a public trust and that "any effort to realize personal financial gain through public office other than compensation provided by law is a violation of that trust." 65 P.S. 5401. You are advised that you must abstain in all future similar situations. Regarding your use of office as to the appointment of your wife, such actions on your part constituted a violation of Section 3(a) of the Ethics Act. This particular violation will be referred to the appropriate law enforcement authority for review and appropriate action. The last matter for review concerns the allegation that you failed to file Statements of Financial Interests for the years 1983, 1984, 1985 and 1986. Statements of Financial Interests are on file with the township for only 1986 and 1987. However, you have filed Statements of Financial Interests for 1983 through 1986 dated January 23, 1989 which were received by this Commission on January 26, 1989. Although your failure to file the Statement of Financial Interests for 1983 through 1985 violated Section 4.4 of the Ethics Act quoted above, this Commission will take no further action on this aspect of the allegation since you have now filed and since there is no evidence to indicate that your failure was an attempt to conceal financial gain. C. Conclusion and Order: 1. As a Chartiers Township Supervisor, you are a public official subject to the provisions of the Ethics Act. 2. You violated Section 3(a) of the Ethics Act when you received insurance benefits at township expense from April, 1985. 3. The amount of the financial gain you received, referenced in paragraph 2 amounts to $614.98. Mr. John Kovatch Page 21 4. You are hereby directed to forward a check to the State Ethics Commission payable to Chartiers Township in the amount of $614.98 within thirty (30) days of the date of this order. 5. Failure to comply with the provision of paragraph 4 above will result in the referral of this matter to the appropriate law enforcement authority. 6. You did not violate Section 3(a) of the Ethics Act when you voted for appointment of your adult son who was not a member of your immediate family. 7. You are further advised that Section 1 of the State Ethics Act provides that public office is a public trust and that any effort to obtain a financial gain through public office, other than the compensation provided for by law is a violation of such trust. You, thus, must in the future abstain from participation in any matter regarding your son. 8. You violated Section 3(a) of the Ethics Act when you voted for the appointment of your wife as custodian for the township. 9. The violation referenced in paragraph 8 will be referred to the appropriate law enforcement authority for review and appropriate action. 10. You violated Section 4.4 of the Ethics Act when you failed to file Statements of Financial Interests for 1983 through 1985. 11. This Commission will take no further action as to the violation in paragraph 10 since you have now filed Statements of Financial Interests for 1983 through 1986 and since there is no evidence that your failure was an attempt to conceal financial information. 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 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, unless the right to challenge this Order is waived, may violate confidentiality by Mr. John Kovatch Page 22 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 the omission, elena G. Hughes Chair Mr. John S. Kovatch c/o John P. Liekar, Sr. Liekar & Liekar 38 West Pike Street Canonsburg, PA 15317 Re: Order No. 716 JJC /rya cc s Public Binder ' STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 January 9, 1990 Dear Attorney Liekar: On January 8, 1990, the State Ethics Commission received your receipt for reimbursing Chartiers Township as required by Order No. 716. This letter will be part of the Order and a public record as such. Sin J. J. C xecut' e Director