HomeMy WebLinkAbout402-R PoradoMr. George Porado
170 Curry Avenue
Turtle Creek, PA 15145
Re: 85 -04 -C
Oear Mr. Porado:
STATE ETHICS COMMISSION
3 8 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Fehruary 18, 1986
Order No. 402 -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 follow:
I. Allegation: That you, a Wilkins Township Commissioner, violated Section
3(a) of the Ethics Act, Act 1978 -170, hy 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 have
served as township commissioner for over 30 years and, as a township
commissioner, are suhject to the provisions of the State Ethics Act. You
served as Chairman of the Recreation Department which includes Buildings and
Grounds and you work with employees hut have not suhmitted a time card or
request for mileage for this work.
2. Wilkins Township has a population of 8,472 (1980 census).
3. You are not employed by the township except in the capacity of
commissioner.
4. You received g1,20r1 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 Building, Pittshurgh, Pennsylvania
15222. (Hereinafter MEIT).
Mr. George Porado
February 18, 1986
Page 2
6. P1EIT invoices record the following payments for your Blue Cross /Shield
coverage.
(a) 1981: $182.08; for Major Medical and Dental coverage from January
thru Decemb
(b) 1982: $584.32 for Major Medical and Dental, Blue Cross employee 65
special from March through December and the above plus Drug Prescription in
February and Major Medical dental coverage only for January.
(c) 1983: $666.31 for Major Medical , Dental , Employee 65 Special,
and Drug Prescription from January thru December.
(d) 1984: $803.15 for Major Medical , Dental , Employee 65 Special, and
Drug Prescription from January thru December.
(e) 1985: $2.16.28 for Major Medical , Dental , Employee 65 Special , and
Drug Prescription from January thru March.
(f) Invoices for 1979 and 1980 could not be located but you did receive
benefits for those years.
(g) 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.
(h) Ilpon notification of our investigation, you told the township manager
to stop having the township pay premiums. You reimbursed the township for
premiums for January thru March, 1985, and will continue to pay for your
coverage until a decision is rendered.
7. On February 13, 1978, Wilkins Township adopted Resolution Mo. 5 -78
"Authorizing the inclusion of the Members of the Board of Commissioners as
subscribers to the Township Group Hospitalization Plan." It stated the
f o l l owi ng :
(a) The commissioners were eligible to participate in the township's
Group Hospitalization Plan pursuant to Act 72 of 1977.
(h) Several commissioners had expressed their desire to become
members of the plan.
2. Act 72 -1977, 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 hut less than ten thousand."
Mr. George Porado
February 18, 1986
Page 3
9. Act 72 -1977 was signed into law by the Governor on November 9, 1977 and
was effective immediately. It amended Section 703 of the First Class Township
Code as follows:
(a) By removing the phrase full compensation" from the last sentence;
"Such salaries shall he payable monthly or quarterly [as full compensationl
for the duties imposed by the provisions of this Act."
10. The November 11, 1977 edition of the Legislative Newsletter of the
Pennsylvania State Association of Township Commissioners included the
following Statement:
Township commissioners would he permitted to
receive other forms of compensation in addition
to their salaries under House Bill 571.
Section 703 of the First Class Township Code
would be amended by removing the words as full
compensation" fran 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 Director of the Borough's Association and its fli rector of
Goverrmental Services Dr. Charles F. Lee Becker 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 been received by him.
(a) The letter which was dated November 30, 1977, was written by !)avid R.
Glancey, Legislative Assistant in the Pennsylvania Senate, and was written to
the Honorable Amos K. Hutchinson, a member of the Pennsylvania House of
Representatives.
(h) Mr. Glancey stated that " in fhisl 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 c anmissioner. For example, ... health and life insurance
and death and pension benefits."
12. The minutes of the Wilkins Township Roard 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 18,679.
Mr. George Porado
February 18, 1986
Page 4
(h) 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 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 .ordi nan.ce provided 'for compensation of township commissioners
assuming office on or after January, 1976, and indicated that such
compensation was to be 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 henefits to township commissioners in 1979
inv- estigated.the question and approved the expenditures.
15 The payments for hospitalization and medical henefits to the township
commissioners has been recorded in township accounts and records for each year
since 1978.
16. On .November 29, 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 TERMS "EMPLOYE" AND
"EMPLOYES" SHALL INCLUDE TOWNSHIP COMMISSIONERS, IF THE
COMMISSIONER WORKS nN A FULL -TIME BASIS IN HIS CAPACITY AS
SUPERINTENDENT, ROAD MASTER, LABORER OR SECRETARY FOR THE
TOWINSHIP. SUCH COMMISSIONERS ELIGIBLE FOR INCLUSION IN
SUCH PLANS t1LIST MEET THE SAME REOUIRF_MENTS, INCLUDING
HOURS OF EMPLOYMENT, AS OTHER FULL -TIME EMPLOYES OF THE
TOWNSHIP. OTHER COMMISSIONERS SHALL BE ELIGIBLE FOR
INCLUSION UNDER A POLICY OR POLICIES OF GROUP INSURANCE
COVERING LIFE, HEALTH, HOSPITALI7ATION, MEDICAL AND
SURGICAL SERVICE OR ACCIDENT INSURANCE ONLY IF THEY PAY
THEIR PRO RATA SHARE OF THE PREMIUMS. SUCH INSURANCE
SHALL BE UNIFORMLY APPLICABLE TO THOSE COVERED AND SHALL
NOT GIVE ELIGIBILITY PREFERENCE TO, OR IMPROPERLY
DISCRIMINATE IN FAVOR OF, COMMISSIONERS.
Mr. George Porado
Fehruary 18, 1986
Page 5
ANY LIFE, HEALTH, HOSPITALIZATION MEDICAL
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 BY SUCH
COMMISSIONERS; AND INSURANCE BENEFITS PAYABLE TO INSUREDS
OR THEIR BENEFICIARIES ARISING OUT OF OR ON ACCOUNT OF
DEATHS, INJURIES, ACCIDENTS OR ILLNESSES OCCEJRRING PRIOR
TO THE EFFECTIVE DATE OF THIS AMENDATORY ACT SHALL REMAIN
THE PROPERTY OF THE INSUREDS OR THEIR BENEFICIARIES.
17. On or about February 6, 1985, you terminated your receipt of the health
and welfare benefits that were provided at township expense.
18. On or about Fehruary 6, 1985, you reimbursed the township $2.22.80 for the
premiums paid on your behalf by the township for the health and medical
benefits covering the period of January 1, 1985, through and including March
31, 1985.
B. Discussion: As a first class township commissioner you are a public
official within the purview of the State Ethics Act. 65 F.S. §402; Dodds,
84 -011. As such, your conduct must conform to the requirements of the State
Ethics Act.
The State 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 business 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 Davis the Commission determined that such henefits constituted financi 1
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 by the township.
Mr. George Porado
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 Novemher, 1985, your
receipt of the types and benefits that are in question 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 benefits
if they are also employed by the township .in certain capacities.
Additionally, the amended First Class Township Code 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
February, 1985. Additionally, you reimbursed the township for the township's
expenditures on your behalf for premiums paid in 1985. As a result, we do not
believe that you violated the State Ethics Act under the law as it currently
exi st.
We further note, that even under the law as it currently existed, 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 benefits was not an
intentional violation of the State Ethics Act, hut rather based 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. Comm. 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 have reimbursed the
township Q222.80 and we will, therefore, take no further action in this
matter.
Mr. George Porado
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 51,000 or
imprisoned for not more than one year or both, see 65 P.S. 409(e).
JJC /sfb
By the Cornmi ssi
Herbert 8. Conner
Chairman