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