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HomeMy WebLinkAbout1208 GrayIn Re: Denise Gray File Docket: X -ref: Date Decided: Date Mailed: Before: Daneen E. Reese, Chair Louis W. Fryman, Vice Chair John J. Bolger Frank M. Brown Susan Mosites Bicket Donald M. McCurdy 00- 041 -C2 Order No. 1208 8/23/01 9/7/01 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. §401 et seq., by the above -named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegation(s). Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was filed and a hearing was waived. The record is complete. A Consent Agreement and Stipulation of Findings were submitted by the parties to the Commission for consideration. The Consent Agreement was subsequently approved. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. §1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under Act 93 of 1998. This adjudication of the State Ethics Commission is issued under Act 93 of 1998 and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with Chapter 11 of Act 93 of 1998. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Gray, 00- 041 -C2 Page 2 I. ALLEGATION: That Denise Gray, in her capacity as a secretary and treasurer for North Shenango Township, Crawford County, violated Section 3(a)/1103(a) of the Ethics Act when she used the authority of her position to authorize insurance deductible payments in excess of $2,000 for her spouse at a time when these benefits were not approved by the North Shenango Board of Supervisors. II. FINDINGS: 1. Gray was first appointed to the position of secretary /treasurer for North Shenango Township, Crawford County, in August 1995 and continues in that position to the present. a. In August 1995, the secretary /treasurer position was classified as part -time with no benefits. 2. Gray, as secretary /treasurer, is responsible for the following duties: a. Bills payable and receivable. b. Preparing and presenting monthly bill lists to the supervisors for approval. c. Making recommendations as to expenditures. d. Preparing the yearly budget. e. Any other duties requested by the board of supervisors. f. There is no written job description for the North Shenango Township secretary /treasurer position. 3. Gray has signature authority on township accounts and is required to sign all checks issued for payment. a. Township checks require the signatures of the secretary /treasurer and two supervisors. 4. Gray was reappointed to the position of secretary /treasurer and granted compensation and benefits at reorganization meetings of the board of supervisors as follows: a. January 2, 1996 - $7.25 /hour with single Blue Cross coverage. b. January 6, 1997 - $7.25 /hour with benefits. c. January 5, 1998 - $7.50 /hour with single Blue Cross coverage. d. January 4, 1999 - $930.00 /month with on going benefits. 1. At a board of supervisors meeting on February 22, 1999, Gray's benefits were reaffirmed as single Blue Cross coverage. e. January 4, 2000 - $962.00 /month plus Blue Cross benefits. f. Deductibles for medical services provided to Donald Gray, Denise Gray's Gray, 00- 041 -C2 Page 3 husband, or any township employee, were not specifically discussed or noted in any of the reorganization or other meeting minutes. 5. The single Blue Cross coverage provided by the township for Gray did not include family coverage. 6. In 1995, and previous years, the township received healthcare coverage from Blue Cross /Blue Shield. a. In the fall of 1995, the township received notification from Blue Cross /Blue Shield of a forty percent rate increase. 7 In the fall of 1995, the township began searching for a new insurance plan to provide healthcare coverage for the township employees. a. The board discussed the rising insurance rates during the September 1995 meeting. b. Gray was directed by the board of supervisors to gather information concerning insurance coverages and costs and provide it to the board. 8. During the October 9, 1995, board of supervisors meeting Chairman Norma Tarr advised the board of the increase for Blue Cross Coverage. a. Denise Gray provided information concerning the different plans available to the board of supervisors. b. The supervisors voted unanimously to send in an application fee to join a new plan. 9. The new health insurance plan being considered by the board was through Manufacturer's Association. 10. During the November 13, 1995, board of supervisors meeting it was reported that Manufacturer's Association sent a letter to the township advising that the township had been approved for health insurance. a. Supervisor Tarr made a motion, which was unanimously approved, to opt for the $407 /month package plan at a savings of over $3,000 /year. 1. The family plan would include full -time employees Fry and Chisholm. 2. An individual plan for Denise Gray was discussed. b. The audience questioned why insurance was being provided for Gray. c. The supervisors reported that the individual plan, with Gray paying the difference for spousal coverage, will be granted in lieu of a substantial pay increase. d. The effective date of the policy for Gray and the other employees was to be January 1996. 11. From 1996 through 1998, Gray was the only part -time township employee receiving township paid healthcare coverage. 12. The township purchased a policy from Manufacturer's Association and paid the Gray, 00- 041 -C2 Page 4 premiums and deductibles for the township employees. a. The township would use the amount of savings in the cost of the low premiums to pay the deductibles for eligible township employees and their family members. b. The budget amount for health insurance would not increase with the new plan. 13. During an executive session prior to the November 13, 1995, meeting at which the supervisors, Gray, and other township employees attended, the new healthcare coverage was discussed. a. During that meeting, the supervisors agreed that Gray's healthcare coverage would be the same as other township employees." 1. The two supervisors present at this meeting disagree as to whether or not this included the township reimbursing Gray for deductibles for her husband, Donald Gray. 2. Supervisor Tarr believed the township should pay the deductibles. 3. Supervisor Staab did not specifically recall discussions but did not believe the township should pay the deductible. b. No official action was taken during this meeting specific to approving township paid deductibles for Donald Gray or any township employee. 14. From 1996 through 2000, the Denise Gray reimbursed the township the cost of Donald Gray's premiums as follows: Cost of Husband/Wife Cost of Single Monthly Amount Year Per Month Per Month reimbursed by Grays 1996 $303.04 $127.37 $175.67 1997 303.06 127.39 175.67 1998 333.31 148.94 184.37 1999 403.05 162.43 240.62 2000 340.12 125.19 214.93 15. From 1996 through 2000 the township reimbursed Denise Gray for the costs of medical deductibles for her husband. a. No formal vote of the board of supervisors authorized this action. b. Deductibles for medical services provided to Donald Gray were not specifically discussed or noted in any of the reorganization or other meeting minutes. 16. The procedures followed in North Shenango Township for reimbursing employees for deductible reimbursements include the following: a. Employees invoiced the township using insurance statements to Gray. b. Gray reviews the invoices, prepares and signs the check, notes the Gray, 00- 041 -C2 Page 5 expenditure on the appropriate ledger, and includes the check on the monthly bill list. c. Deductible reimbursement requests are handled by Gray the same as any other invoice received by the township. 17. Per the supervisors' request, Gray does not attach a copy of the medical bill for any employee to the bill list for the supervisors to review before voting to approve payment of the bills. a. The bills and invoices are placed in a file folder and are available for the supervisors to review prior to, during and after the township meetings. 18. From 1997 to 2000, Gray was reimbursed by the township for medical services provided to her and her husband, Donald Gray, as follows annually: 1997: $ 201.07 1998: $ 177.65 1999: $ 657.79 2000: $ 1,519.54 Total: $ 2,556.05 a. No reimbursements were made for medical services to Donald Gray from township funds in 1996. 19. Gray prepared reimbursement checks for deductibles for medical services for Donald Gray payable to "Denise Gray." a. Gray prepared reimbursement checks payable to township employees Dan Fry and Paul Chisholm when the reimbursement was for their respective family members. 20. Fifteen of the 28 checks made payable to Gray were reimbursement for medical services for Donald Gray only. a. Date Check No. Amt of Gray Deductible 12/24/97 7020 $ 201.07 04/26/99 1484 $ 74.17 05/10/99 1512 $ 40.00 05/17/99 1536 $ 60.00 06/14/99 1577 $ 73.00 09/07/99 1727 $ 30.00 11/08/99 1855 $ 6.58 12/13/99 1920 $ 78.80 03/03/00 2067 $ 21.21 03/14/00 2105 $ 135.70 03/27/00 2129 $ 59.86 04/11/00 2158 $ 69.13 05/08/00 2213 $ 145.76 06/12/00 2273 $ 130.00 08/14/00 2389 $ 50.00 Total $ 1,175.28 Gray, 00- 041 -C2 Page 6 21. In her official capacity as Secretary Treasurer for North Shenango Township, Gray co- signed all reimbursement checks for medical services provided to her husband as her duties required that she sign all checks paid by the township. 22. Gray did not list her husband's name or the names of other dependent individuals covered by the insurance on any township documents including checks, bill lists, and ledgers. a. Gray only listed the names of the township employees on documents relating to deductible reimbursements, not the spouse's names. b. Gray frequently listed reimbursements for deductibles on township records using first initial and last name. 1. Gray listed deductibles for her and her husband in the same manner as she listed deductibles for other township employees and their family members. 23. The township auditors raised the issue of Donald Gray's healthcare coverage during the 1999 township audit. a. The auditors questioned whether Donald Gray was entitled to be included on the township policy and be reimbursed for his deductibles. b. The township supervisors did not respond in writing to the auditors' questions. 24. At the township reorganization meeting on January 2, 2001, the supervisors unanimously voted to appoint Gray as secretary /treasurer in a full time capacity with township paid family healthcare coverage, including deductibles for both her and her husband. 25. From 1997 through 2000, Gray and her husband received from the township the following amounts stemming from the supervisors' approval of medical reimbursement checks including insurance deductibles for the Grays totaling $2,556.05. a. 1997: $ 201.07 b. 1998: $ 177.65 c. 1999: $ 657.79 d. 2000: $ 1,519.54 Total: $ 2,556.05 26. Respondent states she believed her actions at all times were reasonable, in good faith and were approved by the Board of Supervisors since no discussion or vote was ever taken by the board to treat part -time employees approved for health benefits differently from full -time employees approved for health benefits, including reimbursement for insurance deductibles. 27. Respondent further asserts that the Board of Supervisors had ample opportunity to review all bill lists and related invoices, including insurance premiums and deductibles prior to each meeting and that their failure to object to Donald Gray's receipt of payment for his health insurance deductibles and their subsequent vote Gray, 00- 041 -C2 Page 7 each time to approve the entire bill lists ratified the employees' family health insurance benefits. 28. Respondent states that at no time did she willfully or intentionally act to violate the provisions of the State Ethics Act. III. DISCUSSION: At all times relevant to this matter, the Respondent, Denise Gray, hereinafter Gray, has been a public employee subject to the provisions of the Public Official and Employee Ethics Law, Act 9 of 1989, Pamphlet Law 26, 65 P.S. §401, et seq., as codified by the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101 et seq., which Acts are referred to herein as the "Ethics Act." The allegation is that Gray, in her capacity as a Secretary /Treasurer for North Shenango Township violated Section 3(a)/1103(a) of the Ethics Act when she authorized insurance deductible payments for her spouse at a time when those benefits were not approved by the North Shenango Board of Supervisors. Pursuant to Section 3(a)/1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest. The term "conflict of interest" is defined under Act 9 of 1989/Act 93 of 1998 as follows: Section 2/1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. 65 P.S. §402(a)/65 Pa.C.S. §1102(a) Section 3(a)/1103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are reproduced above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. Gray became the secretary /treasurer for North Shenango Township in August 1995 and remains in that position to the present time. The position of secretary /treasurer was classified in 1995 as a part -time position with no benefits. As secretary /treasurer, Gray Gray, 00- 041 -C2 Page 8 has certain responsibilities relating to bills, expenditures, budget and other duties as directed by the board. Gray has signature authority on township accounts and signs checks issued for payment. Such township checks require Gray's signature along with the signatures of two supervisors. As secretary /treasurer, Gray receives compensation and certain benefits as per the action of the board of supervisors. From January 1996 through December 2000, Gray received medical coverage for herself which did not include family coverage. When Blue Cross /Blue Shield, the township's health insurance provider, announced a 40% rate increase in the fall of 1995, the township began researching other insurance plans. During an October 9, 1995, board meeting, the supervisors voted to send an application to join Manufacturer's Association for medical insurance because of lower rates. At the November 13, 1995, board of supervisors meeting, it was announced that Manufacturer's Association would provide health insurance to the township and that family plans would be provided for full -time employees but only an individual plan for Denise Gray was discussed. The new health insurance had an effective date of January 1996. From 1996 through 1998, Gray was the only part -time township employee receiving township paid health insurance coverage. During the executive session of the November 13, 1995, township board meeting, the supervisors agreed that Gray's health coverage should be the same as other township employees but no official action was taken by the board to approve the township paid deductibles for Gray's spouse. From 1996 through 2000, Gray reimbursed the township for the cost of her spouse's premiums. However, in that same time frame, the township then reimbursed Gray for the cost of the medical deductibles for her spouse. However, no formal action was taken by the board of supervisors to authorize such action. Gray was reimbursed a total of $2,556.05 for medical services provided to both her and her spouse from 1997 to 2000. Gray, as the Secretary /Treasurer for North Shenango Township, co- signed all reimbursement checks for medical services provided to her spouse. Gray did not list her spouse's name or the names of other dependent individuals covered by township insurance on any township documents. Such action by Gray as to deductibles was done in the same manner as the deductibles for other township employees and their family members. In 1999, the township auditors raised an issue of Gray's spouse healthcare coverage. The auditors questioned whether Gray's spouse was entitled to such benefits, but the supervisors did not respond in writing to the auditors' inquiry. At the reorganizational meeting on January 2, 2001, the township board unanimously voted to appoint Gray as the full -time secretary /treasurer with township paid healthcare coverage for both her and her spouse. Gray states that she did not willfully or intentionally act to violate the provisions of the Ethics Act and that she believed her actions were reasonable, in good faith and were done with the approval of the Board of Supervisors. Having highlighted the Stipulated Findings and issues before us, we shall now apply the Ethics Act to determine the proper disposition of this case. The parties' Consent Agreement sets forth a proposed resolution of the allegations: insufficient evidence to substantiate a violation of Section 3(a)/1103(a) of the Ethics Act that Gray, from 1997 through 2000, used the authority of her position as the North Gray, 00- 041 -C2 Page 9 Shenango Township Secretary /Treasurer to authorize insurance deductible payments to her spouse which were not approved by the board of supervisors; a technical violation of Section 3(a)/1103(a) of the Ethics Act where Gray's signature was affixed and appeared on township checks including those issued for payroll or reimbursement to herself or her spouse; and a payment of $100 through this Commission to the Commonwealth of Pennsylvania. In applying 3(a)/1103(a) to the instant matter, any violation must be based upon a use of authority of office to obtain a private pecuniary benefit for the public employee, a member of his /her immediate family, or business with which he /she or an immediate family member is associated. If any of the elements are missing, there is no legal basis for finding a violation of Section 3(a)/1103(a). See, McGuire and Marchitello vs. SEC, 657 A.2d 1346 (Pa. Commw. 1995). Further, the Ethics Act requires that any violation be based upon clear and convincing proof which is a higher standard than substantial evidence. Based upon the above criteria, we find no violation based upon insufficient evidence. In this regard, the record reflects that it was the prerogative and action of the board of supervisors as to what full -time and part -time employees would receive in terms of medical insurance. However, we do find a technical violation of Section 3(a)/1103(a) of the Ethics Act when Gray signed checks, including those issued for payroll or reimbursement to herself or her spouse as to medical insurance. In this regard, the utilization of her signature was a use of authority of office. See, Juliante, Order 809. Gray and her spouse did receive a private pecuniary benefit consisting of the medical insurance that was paid for by the township. Due to the fact that, as noted above, the supervisors were the individuals who made the decisions as to the health coverage benefits as to full- and part -time employees, a technical violation is appropriate. We determine that the Consent Agreement submitted by the parties sets forth the proper disposition for this case, based upon our review as reflected in the above analysis and the totality of the facts and circumstances. Accordingly, Gray is directed to make payment of $100 through this Commission to the Commonwealth of Pennsylvania within 30 days of the date of mailing of this Order. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. Gray, as a Secretary /Treasurer in North Shenango Township, is a public employee subject to the provisions of Act 9 of 1989/Act 93 of 1998. 2. Gray did not violate Section 3(a)/1103(a) of the Ethics Act regarding the authorization of insurance deductible payments to her spouse based upon an insufficiency of evidence. 3. Gray technically violated Section 3(a)/1103(a) of the Ethics Act when she signed township checks for payroll or reimbursement to herself or spouse as to medical insurance. In Re: Denise Gray ORDER NO. 1208 File Docket: 00- 041 -C2 Date Decided: 8/23/01 Date Mailed: 9/7/01 1 Gray, as the Secretary /Treasurer for North Shenango Township, did not violate Section 3(a)/1103(a) of the Ethics Act regarding the authorization of insurance deductible payments to her spouse based upon an insufficiency of evidence. 2. Gray technically violated Section 3(a)/1103(a) of the Ethics Act when she signed township checks for payroll or reimbursement to herself or spouse as to medical insurance. 3. Per the Consent Agreement of the parties, Gray is directed to make payment of $100 through this Commission to the Commonwealth of Pennsylvania within 30 days of the date of mailing of this Order. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, DANEEN E. REESE, CHAIR