HomeMy WebLinkAbout423-R GlovaMr. Eugene Glova
c/o Richard J. Green, Esq.
305 Franklin Street
Johnstown, PA 15901
RE: No. 83 -23 -C
Dear Mr. Glova:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
February 18, 1986
Order No. 423 -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 based are as follows:
I. Allegation: That you, a township supervisor, used your public office to
enter into an agreement to have Upper Yoder Township pay for all or portions
of your Rlue Cross and Rlue Shield and that this is a violation of Section
3(a) of the Ethics Act in that it is a use of your public office for personal
financial gain.
A. Findings:
1. That you served as a township supervisor in Upper Yoder Township, Cambria
County, from January, 1978 to the end of December, 1983, when your term of
office expired. As an elected public official you were subject to the
provisions of the Ethics Act.
2. Township records show that you were appointed roadmaster in January, 1983.
You were not appointed as road superintendent, roadmaster, laborer or
secretary - treasurer during 1979, 1Q80, 1981 or 1982.
3. Your participation in the Rlue Cross /Rule Shield program was not approved
at a puhlic meeting.
Mr. Eugene rl ova
February 18, 1986
Page 2
a. You state that you were never told your participation required
approval at a public meeting.
b. You also state that coverage for supervisors was generally accepted
by the insurance carrier and the State Association for Township Supervisors.
4. of the Upper Yoder Township Auditors' reorganization meetings for
1982, 1983 and 1984 confirm that Blue Cross /Blue Shield coverage for you was
not approved by the auditors.
a. The audit state they were informed by the board of supervisors,
which 'included you, that they were not empowered to regulate supervisors'
participation in hospitalization plans.
b. Township auditor resolutions for 1971, 1973, 1977, 1978, 1979, 1980,
1981, 1982, and 1983 show that there was no action relating to
hospitalization plans for supervisors serving as roadmasters.
5. Upper Yoder Township has had hospitalization /medical insurance coverage
for,township employees with Blue Cross of Uestern Pennsylvania and Blue
Shield of Pennsylvania (Group #072108 -00). This plan has been in effect since
at least 1978.
a. Effective April 1, 1982, dental insurance coverage was added to the
plan (Group #05522031).
b. Effective November 23, 1982, vision insurance coverage was added to
the plan (Group #552.2031).
6. , tipper Yoder Township records show that you were added to the
hospitalization, dental and vision care plans as follows:
a. Fehruary 1, 1978:, were added to the Blue Cross /Blue Shield
hospitalization plan at a premium of 534.71 monthly.
b. April 1, 1982: You were given dental coverage at an added premium of
$4.95 monthly.
c. .January 1,1983: You were given vision care coverage at an added
premium of $12.10 monthly.
7.. Upper Yoder'Township paid 52,794.42 in premiums for your
hospital i zati on /medical dental and vi $i on care programs as follows :
a. Hospitalization /medical and major medical premiums from January, 1979
through fecemher, 1983 total of 52,654.07.
Mr. Eugene Glova
February 18, 1986
Page 3
1. Invoices for the period January 5, 1979 to February 5, 1980 show a
monthly premium for you of $34.09. Total paid for that period,
13 months times $34.09 = $443.17.
2. Invoices for the period from February 5, 1980 to and including
August, 1980 show a monthly premium for you of $34.61. Total paid
for that period, 8 months times $34.61 = $276.88.
3. Invoices from September 5, 1980 to and including November, 1980
show a monthly premium of $35.41. Total paid, 3 months times
$35.41 = $106.23.
4. Invoices from December 5, 1980 to and including August, 1981 show a
monthly premium of $38.35. Total paid, 9 months times $38.35 =
$345.15.
5. Invoices from September 5, 1981 to and including December, 1981
show a monthly premium of $40.95. Total paid, 4 months times $40.95
= $163.80.
6. Invoices from January 5, 1982 to and including October, 1982 show a
monthly premium of $48.92. Total paid, 10 months times $48.92 =
$489.20.
7. Invoice from November 5, 1982 shows a monthly increase to $54.63.
Total paid, 1 month times $54.63.
8. Invoice from December 9, 1982 to and including March, 1983 show a
monthly premium of $57.98. Total paid $57.98 times 4 months =
$231.92.
9. Invoices from April 5, 1983 to and including September 5, 1983 show a
monthly premium of $58.21. Total paid $58.21 times 6 months =
$349.26.
10. Invoices from October 5, 1983 to and including December, 1983,
show a monthly premium of $64.61. Total paid, 3 months times $64.61
= S193.83.
11. All invoices for payment of premiums were approved at public
meetings.
h. mental care premiums from April 1, 1982 through December, 1983,
of $121.15.
Mr. Eugene Gl ova
February 18, 1986
Page 4
1. April 1, 1982 through December, 1982, 9 months times $4.95 = $44.95.
2. January, 1983 through December, 1983, 12 months times $6.35 = $76.20.
c. Vision care premiums from January, 1983 through December, 1983, 12
months .times $1.60 = $19.20.
d. Invoices for these premiums were approved at public meetings.
8. - Blue - Cross /Blue Shield group marketing representatives familiar with Upper
Yoder - Township .state that certain guidelines must be followed for a group plan
such as the one in force in Upper Yoder Township. Chief among these are:
a. .Only full -time employees are eligible.
b. To qualify as a full -time, the employee must work a minimum of (20)
hours each week.
c. Each participant must complete an enrollment card requiring general
information concerning personal data, effective date of employment and if a
rehire or new employee. Responsibility for accurate enrollment cards is the
plan's administrators.
d. Elected officials, not full-time employees, can be covered only if
the municipality has a labor agreement or ordinance specifying inclusion of
the officials. Upper Yoder Township has no such ordinance or agreement.
9. You state you were never made aware of these guidelines cited in finding
No. 8. Rather, you were told that supervisors were the "exception" to the
working requi rement.
10. Correspondence of Solicitor Richard J. Green, Jr„ to the township
supervisors regarding hospitalization for the supervisors stated the
fo l l owl ng :
a. February 21, 1984: He had reviewed the Township Code, several legal
cases, and the current Policy Statement of the State Ethics Commission which
to date covered only pensions- annuities and concluded that the present
hospitalization insurance for supervisors was proper because all employees are
covered and the coverage was not intended to produce cash.
b. February' 27, 1984: He advised that there had been no judicial
determination on the Ethics Commission ruling - he had not seen the ruling at
that time but had read about it in the newspaper - he had no choice but to
advise the supervisors to pay the premiums for the hospitalization plans. He
added that the supervisors should expect the auditors to attempt to surcharge
and a decision could be made at that time.
Mr. Eugene Glova
February 18, 1986
Page 5
c. March 26, 1984: Solicitor Green advised the auditors of tipper Yoder
Township that as of the date of the auditors' letter, the township would no
longer pay Blue Cross premiums and that Mr. High and Mr. Cowie had agreed to
repay the township for premiums during 1983. However, he noted that
because Mr. Cowie had appealed the Ethics Commission ruling and there was a
pending county court case and several other contradictory court decisions, he
advised them to withold repayment at least until lir. Cowie received a response
from the Ethics Commission.
11. On December 3, 1985, in documents he submitted to the State Ethics
Commission, Solicitor Green says his correspondence did not apply to premiums
paid for you in 1983, the year you served as roadmaster.
12. On March 6, 1984, the auditors asked the supervisors to prepare invoices
asking you and other supervisors to reimburse the township for hospitalization
and other Blue Cross paid for by the township in 1983 and 1984.
13. The supervisors of Upper Yoder Township, took the following actions:
a. On March 6, 1984, they pilled you for $812.43 for township paid
hospitalization, eye, and dental plan premiums for 1983 and $72.55 for the
premiums in 1984.
b. As of December 5, 1985, they had not received reimbursement.
14. You have not reimbursed the township.
B. Discussion: As a township supervisor you are a public official as that .
term is defined in the State Ethics Act. 65 P.S. v$402. As such, your conduct
is subject to and must, therefore, conform to the requirements of the -Act.
Sowers, 80 -050; Krane, 84 -001.
The Ethics Act provides, in part, that:
Section 3. Restricted activities.
(a) No public official or public employee shall use his
puhlic 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).
We have on several occasions addressed the question of whether a non - working
township supervisor, may within this provision of law,•receive township
provided hospitalization, medical and other insurance. We have concluded that
such an official may not approve for himself or otherwise receive such
lir. Eugene (;1 ova
Fehruary 18, 1986
Page 6
benefits without violating the provisions of the Ethics Act. Krane, 84 -001;
Cowie, 84 -010. In these matters, the Commission determined that such benefits
constituted financial gain other than the compensation provided by law.
In those rulings we concluded that, "after analyzing the Second Class
Township Code, the case law surrounding that code, certain provisions of the
Insurance Code and recently reported cases that a supervisor such as yourself,
who is not employed in any other capacity by the township, could not,
consistent with Section 3(a) of the Ethics Act, use his public office to
obtain and have the township pay the premiums for hospitalization insurance.
Basically, we are not convinced that these laws allow supervisors who are not
serving the township in any capacity other than a supervisor, to benefit from
township -paid insurance coverages which were available to "employees" of the
township See Krane, supra and the cases cited therein which are incorporated
herein by reference.
Clearly, had you been employed by the township as provided for in the
Second Class Township Code, additional compensation is provided for by law.
However, even if you were so qualified, that compensation must be fixed by the
board of township auditors. You assert that you were entitled to township
provided benefits for the period of time for which you served as roadmaster.
Our calculations indicate that this would include the following township
expenditures:
Hospitalization: $173.94, (3 months x 57.98)
(See findings No. 7(a)(8))
Dental
1!i sioTi:
$349.26, (6 months x 58.21)
(See findings No. 7(a)(9))
$193.83, (3 months x64,61)
(See findings No. 7(a)(10))
Total $717.03
$76.2.0 (See findings 7(h)(2))
$19.20 (See finding 7(c))
Total 1983 township expenditure: $812.43
We note that you indicated that the above calculation should include the
December, 1983 payments that the township expended for the Janaury, 1984
premium payment, You were not, however, a working supervisor in January of
1984.
P1r. Eugene Glova
February 18, 1986
Page 7
Clearly, under all existing law, a non - working supervisor may not receive
such compensation. See In re: Appeal of the auditors report of 'Pluncy Creek
Township, 16 Lycoming Rep 159; Conrad v. Exeter Township, 76 Berks L.J. Mo. 2
p. 7; In re: North Strabane Township Board of Supervisors, 63 Wash. Co. 137,
affirmed per curiam 470 A.2d 52.4, (1984). Our calculations indicate that the
benefits paid by the township for you as a non - working supervisor amounted to
$1,981.99 ($2,794.42, finding 7, minus $812.43, cited above).
In addition, the auditors have confirmed that they never intended any
non -worki ng supervisor to receive that benefit. The fact the township
auditors never surcharged you for this unauthorized receipt of benefits has
been held not to constitute approval. See McCutcheon v. State Ethics
Commission, 466 A.2d 2.83 At 2.81, (1981).
With relation to the period of time during which you in fact were a
working supervisor, the year 1983, the township paid $812.43 in premiums.
A majority of the board of auditors have indicated that while such was
never recorded, they intended that working supervisors were intended to have
such benefit. Our order will reflect this fact. See Hunt, No. 384 -R.
Finally, we note that even if your receipt of such financial gain was
without corrupt intent, this fact is not determinative in relation to the
recipients right to retain said gain. See Warminster Township Appeal, 56 D.
C. 2d 99, (1971) at 123; Hendricks v. Coast Rockhill Township, 1 D. & C. 3d
763, (1977), at 774; In re: Kestler Appeal, 66 Pa. Commw. 1, 444 A.2d 761,
(1982).
Based upon the foregoing, your approval as a supervisor of the payment
of the premiums from township funds and your receipt of these benefits
constitute a violation of the State Ethics Act.
Thus, consistent with Krane, we must conclude that it was a violation of
the Ethics Act for you to use your public office or to "allow" yourself to be
placed on such policies, to obtain or to have the township pay for the
premiums associated with this insurance coverage because these payments are
clearly not authorized by law. The amount that the township paid on your
behalf as noted previously was $1,981.99.
The Ethics Act provides that:
Section 9. Penalties.
(a) Any person who violates the provisions of Section 3(a)
and (b) is guilty of a felony and shall he fined not more
than S10,0nr) or imprisoned for not more than five years,
or he both fined and imprisoned. 65 P.S. 409(a).
Per. Eugene Glova
February 18, 1986
Page 8
(c) Any person who obtains ,financial gain from violating
any provision of this act, in addition to any other
penalty provided by law, shall , pay into the State
'Treasury a sum of money equal to three times the
financial gain resulting from such violation. 65 P.S.
409(c) .
Additionally, the Commission may make recommendation for prosecution by
or referrals to the appropriate prosecuting authority unless the person who is
in violation of the Act returns any financial gain obtained in violation of
the Act. See McCutcheon /Hoak v. State Ethics, Commission, 77 Pa. Commw. 529,
466 A.2d 283, (1982). We believe that this result should be reached in the
instant matter. We will not impose the treble damage provisions of Section
409(c).
C. Conclusion: You violated Section 3(a) of the State Ethics Act when you,
as a township supervisor, received at the township expense, hospitalization,
medical, dental and vision insurance in excess of that compensation provided
by law. Our calculations indicate that the expense to the township for such
insurance amounted to S1,981.99. Unless, within thirty (30) days of this
Order, you forward to the State Ethics Commission a check in the above amount,
made payable to Upper Yoder Township, we will refer this matter to the
appropriate law enforcement officer for review.
Our files in this case will remain confidential in accordance with
Section 8(a) of the Ethics Act, 65 P.S. 408(a). However, this Order is final
and will be made available as a public document 15 days after service (defined
as mailing).
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 Conmi s
Verbert 6: Conner
Chaff nnan