HomeMy WebLinkAbout400-R HanlonMr. John J. Hanlon
Wilkins Township Supervisor
402 Elwood Drive
Pittsburgh, PA 15235
Re: 84 -139 -C
Dear Mr. Hanlon:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Fehruary 18, 1986
Order No. 400 -R
The State Ethics Commission has received a complaint regarding you and a
possible violation of Act 170 of 1978. The Commission has now completed its
investigation. The individual allegations, conclusions, and findings on which
those conclusions are hased are as follows:
I. Allegation: That you, a Wilkins Township Commissioner, violated Section
3(a) of the Ethics Act, Act 197R-170, by having the township pay for a
hospitalization /medical plan in which you participate.
A. Findings:
1. You are an elected puhlic official serving in Wilkins Township; you were
appointed to an unexpired term in 1972 and elected in 1973 and as a township
commissioner, are subject to the provisions of the State Ethics Act.
2. Wilkins Township has a population of 8,472 (1980 census).
3. You are not employed hy the township except in the capacity of
commissioner.
4. You received $1,200 salary per year as commissioner.
5. Medical and hospitalization insurance for township employees and
commissioners is administered hy the Municipal Employers Insurance Trust,
Administrative Office, 1514 Union Rank Ruilding, Pittshurgh, Pennsylvania
15222. (Hereinafter MEIT),
6. MEIT invoices record the following payments for your Rlue Cross /Shield
coverage.
Mr. John J. Hanlon
Fehruary 18, 1986
Page 2
(a) 1981: $1700.21; for Blue Cross, Blue Shield, Dental from January
thru December and Major Medical from February thru December.
(b) 1982: $2458.93; for Blue Cross, Blue Shield, Major Medical and
Dental from Janauary thru December and Drug prescription from February thru
December. A charge for vision care was included on the February bill but
dropped on succeeding bills for the year.
(c) 1983: $2773.44 for Blue Cross, Blue Shield, Major Medical, Dental.
and Drug Prescription from January thru December.
(d) 1984: $3200.52 for Blue Cross, Blue Shield, Major Medical , Dental
and Drug Prescription from January thru December.
(e) 1985: $798.21 for Blue Cross, Blue Shield, Major Medical, Dental,
and Drug Prescription from January thru March 1985. Payments are continuing
to be made by the township.
(f) The investigation of the State Ethics Commission in this matter
continued through the first quarter of 1985. Investigative activity ceased
after that point in time.
(g) Invoices for 1979 and 1980 could not be located but you did receive
benefits for those years.
(h) The solicitor, John Means, stated that he believes you are entitled
to Blue Cross and Blue Shield coverage according to the Township Ordinance and
First Class Township Code.
7. On February 13, 1978, Wilkins Township adopted Resolution No. 5 -78
"Authorizing the inclusion of the memhers of the Board of Commissioners as
subscribers to the Township Group Hospitalization Plan." It stated the
following:
(a) The commissioners were eligible to participate in the township's
Group Hospitalization Plan pursuant to Act 72 of 1977.
(b) Several commissioners had expressed their desire to become
members of the plan.
8. Act 72 -1477, in part, provides that each commissioner shall "receive a
salary of not more than ... twelve hundred dollars per year in townships
having a population of four thousand and not more but less than ten thousand."
9. Act 72 -1977 was signed into law by the 0overnor on November 9, 1977 and
was effective immediately. It amended Section 703 of the First Class
Township Code as follows:
Mr. John J. Hanlon
February 18, 1986
Page 3
(a) Ry removing the phrase "as full compensation" from the last
sentence; "Such salaries shall he payable monthly or quarterly [as full
compensation] for the duties imposed by the provision of this Act."
10. The November 11, 1977 edition of the Legislative Newsletter of the
Pennsylvania State Association of Township Commissioners included the
fo l l owi ng Statement :
Township commissioners would be permitted to
receive other forms of compensation in addition
to their salaries under House Rill 571.
Section 703 of the First Class Township Code
would be amended by removing the words "as full
compensation" from the paragraph...the amendment
would thus allow among other things township
commissioners to receive such benefits as
health, life insurance, and pensions paid for
by their township.
a. The Legislative Newsletter was prepared under the guidance of the
Executive fli rector of the Borough's Association and its Ili rector of
Governmental Services, Dr. Charles F. Lee Recker and John C. Goodwin, both of
whom had substantial experience in local governmental affairs.
11. On or about February 12, 1985, Mr. Wilmer K. Baldwin, Secretary- Manager
of Wilkins Township, forwarded to the State Ethics Commission a copy of a
letter which he indicated had heen received by him.
(a) The letter which was dated November 30, 1977, was written by f)avid R.
Glancey, Legislative Assistant in the Pennsylvania Senate, and was written to
the Honorable Amos K. Hutchinson, a memher of the Pennsylvania House of
Representatives.
(h) Mr. Glancey stated that " in Phis] opinion, (emphasis added) the
effect of the amendment to Section 703 ... deleting the 'full' before the term
'compensation' will permit compensation for the commissioners to he more
comprehensive and to include more than mere remuneration for service in the
elected position of commissioner. For example, , health and life insurance
and death and pension benefits."
12. The minutes of the Wilkins Township Board of Commissioners meeting for
September 10, 1984, indicate that the secretary reviewed the following
documents concerning medical insurance for the commissioners.
(a) The 1984 budget for medical insurance for members of the hoard of
commissioners which was g8,67n.
Mr. John J. Hanlon
February 18, 1986
Page 4
(b) Resolution 5 -78 of February 13, 1978 authorizing participation of
programs based on State Act 72 of 1977 which amended Section 703 of the First
Class Township Code.
(c) Act 72 of 1977 signed -by the Governor on November 9, 1977.
(d) Legislative letter No. 13 of November 11, 1977 of the Pennsylvania
State Association of Township Commissioners indicating the intent of
legislation which began Act 72.
13. On June 10, 1984, Wilkins Township adopted Ordinance No. 560.
a. That ordinance provided for compensation of township commissioners
assuming office on or after January, 1976, and indicated that such
compensation was to he in accordance with Section 603 of the First Class
Township Code.
14. The township auditors questioned the legality of the payment of
hospitalization and medical benefits to township commissioners in 1979
investigated the question and approved the expenditures.
15. The payments for hospitalization and medical benefits to the township
commissioners has heen recorded in township accounts and records for each year
since 1978.
16. On November 2.9, 1985, Act 82 of 1985, was signed into law by the
Governor. This Act is an amendment to Section 1502 of the First Class
Township Code and provides for the purchase by the township board of
commissioners of various types of insurance for township employees. The Act
further provides as follows:
AS USED IN THIS CLAUSE, THE TEPMS "EMPLOYE" AND
"EMPLOYES" SHALL INCLUDE TOWNSHIP COMMISSIONERS, IF THE
COMMISSIONER WORKS ON A FULL -TIME BASIS IN HIS CAPACITY AS
SUPERINTENDENT, ROAD MASTER, LARORER OR SECRETARY FOR THE
TOWNSHIP. SUCH COMMISSIONERS ELIGIBLE FOR INCLUISION IN
SUCH PLANS MUST MEET THE SAME REOUIREMENTS, INNCLUDING
HOURS OF EMPLOYMENT, AS OTHER FULL -TIME EMPLOYES OF THE
TOWNSHIP. OTHER COMMISSIONERS SHALL BE ELIGIRLE FOR
INCLUSION UNDER A POLICY OR POLICIES OF GROUP INSURANCE
COVERING LIFE, HEALTH, HOSPITALIZATIOrN, MEDICAL AND
SURGICAL SERVICE OR ACCIDENT INSURANCE ONLY IF THEY PAY
THEIR PRO RATA SHARE nF THE PREMIUMS. SUCH INSURANCE
SHALL RE UNIFORMLY APPLICARLF TO THOSE COVERED AND SHALL
NOT GIVE ELIGIRILITY PREFERENCE TO, OR IMPROPERLY
DISCRIMINATE IN FAVOR OF, COMrMISSIOrNERS.
Mr. John J. Hanlon
February 18, 1986
Page 5
ANY LIFE, HEALTH, HOSPITALIZATION, MEnICAL
SERVICE OR ACCIDENT INSURANCE COVERAGE CONTRACT ENTERED
INTO BY A TOWNSHIP BETWEEN JANUARY 1, 1959, AND DECEMBER
31, 1984, THAT INCLUDES OR PROVIDES COVERAGE FOR
COMMISSIONERS SHALL NOT BE VOID OR (UNLAWFUL SOLELY BECAUSE
OF SUCH INCLUSION OF COMMISSIONERS; NOR SHALL ANY PENALTY,
ASSESSMENT, SURCHARGE OR DISCIPLINARY ACTION OF ANY KIND
OCCUR AS A RESULT OF SUCH PARTICIPATION RY SUCH
COMMISSIONERS; AND INSURANCE BENEFITS PAYABLE TO INSUREDS
OR THEIR BENEFICIARIES ARISING OUT OF OR ON ACCOUNT OF
DEATHS, INJURIES, ACCIDENTS OR ILLNESSES OCCURRING PRIOR
TO THE EFFECTIVE DATE OF THIS AMENDATORY ACT SHALL REMAIN
THE PROPERTY OF THE INSUREDS OR THEIR BENEFICIARIES.
17. During the calendar year 1985, after you became aware of the potential
question regarding the receipt of your insurance and health benefits, you
terminated your participation in this program.
18. By letter dated Janurary 28, 1986, you notified the State Ethics
Commission that you were going to reimburse the township 5798.21 for the
premiums paid on your behalf hy the township for the health and medical
benefits covering the period of January 1, 1985, through and including March
31, 1985. This was the period of time during which the Ethics Commission
investigation was being conducted.
R. Discussion: As a first class township commissioner you are a public
official within the purview of the State Ethics Act. 65 P.S. X402; Dodds,
84 -011. As such, your conduct must conform to the requirements of the State
Ethics Act.
The Ethics Act provides as follows:
Section 3. Restricted activities.
(a) No public official or public employee shall use his
public office or any confidential information received
through his holding public office to obtain financial gain
other than compensation provided by law for himself, a
member of his immediate family, or a husiness with which
he is associated. 65 P.S. 403(a).
The State Ethics Commission has previously reviewed the question of
whether these types of insurance coverages constitute financial gain within
the above provision of law. See Krane, 84 -001 and Davis, 84 -012. In Krane
and navis the Commission determined that such benefits constituted financial
gain. We will adopt the analysis in those Opinions as applicable here and
move to the question of whether these coverages are "provided by law" to he
paid for hy the township.
Mr. John J. Hanlon
February 18, 1986
Page 6
We have previously considered this issue specifically within the purview
of the First Class Township Code. See Dodds, 84 -011. In Dodds, we concluded
that a commissioner in a township of the first class could not receive or
secure for himself through his office, compensation, whether considered
monthly payments, salary or the value of insurance premiums paid for by the
township in excess of the compensation allowed and limited by law.
Clearly, under this Commission's previous ruling and the provisions of
the First Class Township Code as they existed prior to November, 1985, your
receipt of the types of benefits that are involved in the instant matter were
clearly questionable. However, as of November 2.9, 1985, the First Class
Township Code was amended. The amended code now provides that township
commissioners may receive certain health, medical, life and insurance henefits
if they are also employed by the township in certain capacities.
Additionally, the amended First Class Township Code
p provides that any
insurance benefits in which commissioners were included between the years 1959
and December 31, 1984, shall not he void and said commissioner shall not be
charged, or assessed any other penalty as a result of his participation in
that plan. Thus, under the foregoing provision of law, even if the benefits
that you have received were not in accord with the Township Code, and the
State Ethics Act, this Commission may not now assess any penalty for your
participation in said plan and the township's payment on your behalf of the
premiums, regarding the hospitalization plans. The "amnesty" provision of Act
82, however, does not go beyond December 31, 1984. As a result, any benefits
paid after that period of time on behalf of township commissioners could be
subject to assessment under the State Ethics Act. We note, however, that as a
result of the State Ethics Commission investigation, you voluntarily
terminated your participation in the township's insurance programs in 1985.
Additionally, you have notified the Commission of your reimbursement of the
premiums for this period of time.
We further note, that even under the law as it currently exists, while
you may have received a financial gain that was not provided for in the First
Class Township Code, we believe that your receipt of these henefits was not an
intentional violation of the State Ethics Act, but rather hased upon the
advice that you have received from various advisors. Good faith receipt of
such benefits, however, will not alleviate the necessity of a public official
reimbursing his governmental body for the receipt of compensation for which he
was not entitled. See Alleghney County v. Grier, 179 Pa. 639, 36 A. 353
(1897), Kestler Appeal, 66 Pa. Commw. 1, 444 A.2d. 761, (1982).
C. Conclusion: 'Under the foregoing circumstances, while there may have been
a technical violation of the State Ethics Act, you are reimbursing the
township 8798.21 and we will, therefore, take no further action in this
matter.
Mr. John J. Hanlon
February 18, 1986
Page 7
This order is final and will he released as a public document three days
after the issuance of this order.
Any person who violates the confidentiality of a Commission proceeding
is guilty of a misdemeanor and shall be fined not more than S1,000 or
imprisoned for not more than one year or both, see 65 P.S. 409(e).
By the C ssio
JJC /sfb
Herbert tl. Conner
Chairman