Loading...
HomeMy WebLinkAbout972 GroganIn re: Martin. Grogan Before: STATE:ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLyANIA 1712 - 0 Fia.'e Date Date Docket :. . Decided: Mailed. :, Daneen.E. Reese, Chair. Austin M'., Lee, Vice, Chair Roy W. Wilt_ Boyd E. Wolff 91- 035 -C; 94- .069 -C2 05/04195. 0 The Investigative Division of the State Ethics Commission . cd ducted an investigation regarding possible violations of the State Ethics Law, Act 170 of 1978, P.L. 883, and Act 9 of 1989, P.L. 26. Written notice of the specific allegation(s) was served at the commencement of the investigation. A Findings Report was issued and served upon completion of the investigation which codstituted the Complaint by the Investigation Division. An Answer was filed and a hearing was waived. A consent agreement was submitted by the parties to the Commission for consideration which was subsequently approved. This adjudication of the Commission is hereby issued which sets forth the individual Allegations, Findings of Fact, Discussion, Conclusions of Law and Order. This adjudication is final and will be made available as a public document fifteen days after issuance. However, reconsideration may be requested which will defer public release of this adjudication pending action on the request by the Commission. A request for reconsideration does not affect the finality of this adjudication. A reconsideration request must be received at this Commission within fifteen days of issuance and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Cede 52.38 and/or 51 Pa. Code 521.29(b). The files in this case will remain confidential in accordance with Section 8(a) of Act 170 of 1978 and Act 9 of 1989, 65 P.S. 54 Any person who violates confidentiality of the Ethics Law is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year, 65 P.B. §409 (e) Confidentiality does not preclude discussing this case w;th an attorney at law. Grogan, 91- 035 -C; 94- 069 -C2 Page 2 I. ALLEGATION: That Martin Grogan, Real Estate Tax Collector for Moon Township, Allegheny County, violated the following provisions of the State Ethics Act (Act ].70 of 1978) when he Bused -the authority of his office to receive compensation not provided or by law in the form of foes jfor the issuance of tax certification letters. Section 3. Restricted Activities. ,(a�) No ` public- official or public employee shall \ use tis public office or any confidential information-received through his hoiding 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). That Martin Grogan, a public official in his capacity as a Tax Coliectpr foc Soon Township, Allegheny County, violated the fgllpwi4g provisions of the State Ethics Act (Act 9 of 1989) when he eharged'and collected fees for tax certifications without the approval of the municipality. Section 3(a) of Act 9 of 1989 provides: Section 3. Restricted Activities (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 P.S. 5403(a). Section 2. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office ©.r employment or any confictertial informati on received through his holdirx, pt ric office or employment, for the private, pecuniary benefit_ of himself, a member of lAs, mediate family - o a business with which he or a member of his: immediate family is associlftted. "Conflict "' om of interest" does- not: ipclude• an action having Grocxass;, 93r- -035 -Cv 94 -04B-C2 Page -: 3 =' 65 P. 5 ., $402.. II. F339f'ZNGS: a• dea a tons13M9.c impact or **ch, affects to..- the: same=. degree: a cl conskisting of, the general`. public or. a subciastst cpns stipg of an intivatxy, occupation or oth r group which includes; the publi,c off3L or_ putb14 emp a member of ha s:: itgutecilatte gpalk,747 a trust:resat with wh ch. he, or as member. o,; Isis i=redia+te- family, is assoola tedi. 1. Macr.tin Grogan has served as the. elected Talc, Co,3,}ce Moon. Township, Allegheny Cour;.ty, since 1959. a. Moan Township is a Second Class Township., 2. Grogan's duties as a Tax Collector included 0o11eut4ozi yf Re4a] Estate and Per Capita Taxes for Moon Township (Towsghi ) gRat Moon Area School District (School District), 3. Grogan's compensation as Tax collector is set by bpth tbie Township and School District. 4. Moon Township set the tax collector's compensation in t fp of resolutions as follows: a. Resolution R -12 -1985, adopted February 13, 1985, cgouerq i the period January 1, 1985, through December 31, 1889. Approved compensation included $14,000.00, salary to cover rent and all utilities except telephone, with the Township to provide Surety Bonds; all necessary forms; and postage. All consumable supplies and /or F,eia expenses are to be provided at the tax collector's expense. b. Amendment to R -4 -1986, adopted June 11, 1986, authgr..zed the tax collector to receive office expenses totai.. $6,000.00 annually to facilitate the smooth operat3.oa the tax office. c. Resolution R -15 -1989, adopted February • 8, 1989, cova4. g the period January 1, 1990, through December 31 app : 3;; included the approved compensation of $26,,00 annually for the collection_ of real estate and ' .per capita taxes, $6,000.00 for office expenses, and .5% collection fees. The Township is to provide all Surety Bonds; office space; utilities; forms; and necessary postage. The tax collector 4s responsible for phone Grogan, 91- 035 -C; 94- 069 -C2 Page 4 expenses. 5. Moon Township provided office space at no cost to Grogan from 1959 until 1993. a. No other for of compensation was approved by the Township. 6. Moon Area School District Board of Education appointed Martin Grogan as Tax Collector and set compensation as follows: a. June 26, 1986: , b.- 'June 15, 1987: Martin Grogan, Moon Township Tax Collector, appointed one of the collectors of Delinquent Real- Estate Taxes and Delinquent Per Capita Taxes for the school district. Tax Collectors' commissions are fixed as follows: . Compensation in the amount of $9,500 in the 1986 -1987 fiscal year, with an allowance of $15,500.00 for office expenses, payable,in twelve equal installments. Martin Grogan appointed as Delinquent Real Estate and Per Capita Tax Collector. Rate of compensation for the collection of non - liened real estate taxes shall be. 5% of such taxes collected. after June 30th of any current fiscal, year, with the exception of cases where the services of a solicitor for a fee ars involved, in,which cases there shall be no commission., A ceiling of $7,000.00 in commissions in any fiscal year was set. Tam QolZeotor commissions set as follows:: the axammtaf $9,50O.0'0 in tt 13 8:7,--119 8 8' fiscal. year, with an aZLewan a of $15,-5OEt . for office ex secs,,, payable in twelve equal installments— c. June 1? , 1;99 ,: zdan Tax 8:evicm appoift.ed D:Qli;nquent ReaL E3tat ' Tex Collector Groomm,. 91- 03'5' -C; 94- 0G9 -C2; Page 5 d. 'nine L8, 1991: for Moon and Crescent Townships. Tax Collectors' Commissions shall be fixed as follows: Moon Township Real Estate and Per Capita Tax collector the amount of $9,500.00 in the 190 -1991 fiscal year Jordan Tax Service appointed Delinquent Real Estate Tax Collector for Moon and Crescent Townships. Moon Township collectors of Real Estate and Per Capita Taxes' commissions are as follows: The amount of $9,500.00 in the 1991- 1992 fiscal year, with an allowance of $15,500.00 for office expenses, payable in twelve equal payments. During his years of service as Moon Township Tax Collector, Martin Grogan has provided certifications to various abstract companies, banks, attorneys and individuals that taxes relating to specified real estate have or have not been paid. a. Grogan has charged a fee for such tax certifications. 8. Martin Grogan has provided tax certifications since the late 197O's to companies and individuals requesting information for a fee of $10.00 for three years certification that taxes were paid. a. A fee was charged when the number of requests for tax certification increased and became a requireeln for r eal estate closings. b. .A fee of $5.00 was established in the late 197P'q 1. Grogan established that fee at some else's suggestion. c. Sometime prior to 1988 Grogan increased the fee to $10. d. Grogan did discuss the fee with the former township solicitor. e. Grogan asserts the certifications were provided as a Grogan, 91- 035 -C; 94- 069 -C2 Page 6 service not as a requirement of his position. 9. Prior to 1991, there was no official approval in the form of an ordinance or resolution authorizing or approving the certification fees .charged by Grogan but the Township Commissioners and /or the Township Managers knew that the Tax Collector did issue tax certifications when requested to do so and d&d charge a fee. 10. Grogan's tax office is staffed by Grogan, his wife,, and one part -time employee on an as needed basis. 11. The majority of tax certifications are prepared by Grogan. a. Certifications prepared by Grogan's wife or the part -time employee were reviewed and approved by Grogan. 12 b. Grogan estimated that certifications took approximately thirty minutes to complete. c. An Qesasion these were requests which took longer to complete. The process for providing a tax certification by Grogan included the following= a. Obtaining tax information for a three year period; b. Re4 Qif9 that information to a written form; c, ?eiFiewing wgrk pot personally done; and c, aigaing, mailing, or in some other way preparing for 4eliy sy . 141 TAN 0 a0Tt fj:eatien records- maintained by Martin Grogan reflect the fg :lgwing ggstifjgations were issued and paid for between Jarn arm, Z986, and 4uly l g 2991: , Year • # Taaued # Paid For Amount Received 1986 415 344. - $3,840.00 1987 410 4Q0 $4,000.00 1988 358 343 $3,430.00 2989 373 358 $3,580.00 1990 413 4QQ $4,000.00 1991 None Prior to JuaY - 0. - TOTAL 1,969 2,885 $18,850.00 14. Tax certifiqatiLeas . issued and fees received by Grogan, by gtigdAd, 91 =020- 94- 069-02 Page 7 period, from June, 1398, to July, 1991, are as b , t, d. Yeti 9/10/88 to 12/31/88 1/1/95 to 6/25/89 6/26/83 to 12/31/89 1/1/90 to 12/31/90 # Paid_.7or Amount _Received 178 162 196 400 as follows: $1,780.00 $1,620.00 $1,960.00 54,000.QQ $9,360.00 16. Iftoal dime 26, 1989, through December 31, 1990, Martin Grogan tece#,rred a total of $3,960.00 in the form of tax Certifications. 16. Zn October, 1990, Grogan became aware of a State Ethics Cbnmission ruling in a Case involving a tax collector. a. That decision stated that fees for certifications could not be collected without approval of the municipality. Based on that decision, Grogan discontinued issuing certifications for the three year period. 17. In July 17, .1951, the Moon Township Board of Supervisors approved Ordinance #355, authorizing the elected tax collector to provide tax certifications upon request to the public. Terms of the Ordinance include: Section 2 of the Ordinance states that, "the elected Tax Collector of Moon Township may assess, collect and retain from the party requesting the certification, as compensation for providing such service, a fee of $5.00 for each year for which a certification is requested,.not to exceed a total of $15.00." Section 3 of the Ordinance states that: whenever the tax collector or his designee collects a fee for a Tax Certification letter as herein before described, the tax collector shall also be required to collect an additional flat fee of $5,00 from the party or parties requesting a Tax Certification letter regardless of the number of years for which. the Tax Certification letter is requested. Said $5.00 flat fee shall be collected by the tax collector, but remitted to the Township of Moon not less than once each month an or before the last day of each month. This $5.00 flat fee maybe used by the township to defray costs associated with the tax collection office or any other legal use. In no instance Should the total cost of a Tax Certification letter from the tax collector's office exceed a total of $20.00 unless approved by the Board of Supervisors. Grogan, 91- 035 -C; 94- 069 -C2 Page 8 Section 4 of the Ordinance states that: "the tax collector shall deposit all taxes collected to the township account established for this purpose within 24 hours of the close of each business day whenever the total of all such deposits exceeds $5,000.00, and further shall provide the treasurer of the taxing district or his designee with a written statement of said deposit within 24 hours after it has been deposited." 18. The total fees received by Martin Grogan for issuing tax certifications since June 25, 1989: _ a. June 26, 1989 to December 31, 1989: $1,960 ,, ,,00 b. 1990: '$4,000.00 $5,'960.00 19. For the period 1986 though approximately November, 1990, Grogan was not aware and had not been advised that, collecting a fee for issuing tax certification without a municipal ordinance was a form of compensation. 20. Grogan acted in good faith throughout and did not knowingly or intentionally violate the Ethics Law. 21. Grogan . issued tax receipts as required by law, but there is no legal mandate that he issue three year tax certifications. III. DISCUSSION: Initially, it is noted that the allegations in this case relate to both Act 9 of 1989 and Act 170 of 1978. In this regard Section 9 of Act 9 of 1989, P.L. 26, provides, in part, as follows: This amendatory adt shall not apply to violations committed prior to the _effective date of this act, and causes of aeition initiated for such violations shall be governed by the prior law, which is continued in effect for that purpose as if this act Were not in force. For the purposes of this section, a violation was committed prior to - the effective date of this acct if any elements of the violations occurred prior thereto. Under both Act 170 of 1978 and Act 9 of 1989, Martin Grogan, hereinafter Grogan, as a Real gstate Tax Collector in Mood Township, Allegheny County, is a public official as that term is defined under both acts. See also 51 Pa. Code.' AA such, his conduct is subject to the provisions - of both Laws and the restrictions therein are applicable to him. Grogan, 91 94- 069 =t$ Page 9 Under Section 3 (a) of Act 9 of 1989 quoted above, a public official shall not engage in conduct that constitutes a conflict of interest. The term "conflict of interest" is defined in the allegations. Under Section 3(a), of Act 110 of 1978 quoted in the allegations, this Commission has determined that use of office by a public official to obtain a financial gain for himself or a 'Member of his immediate family or a business with which he is associated which is not provided for in law transgresses the above provision of law. Thus, use of office by a public official to obtain; financial gain which is not authorized as part of his Compensation is prohibited by Section 3(a): Hoak /McCutcheon v. ats.te Ethics Commission, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1983); Yacobet v. State Ethics Commission, 109 Pa. Commw. Ct. 432 331 A.2d 536 (1987) . Similarly, Section 3(a) of the Ethics Act ou3.d prohibit a public official /employee from using public office to advance his own financial interests; Koslow v. State Ethic$ .tiiamnission, 116 Pa. Commw. Ct. 19, 540 A.2d 1374 (1988) . The issue before us is whether Grogan violated either Section 37a) of Act 170 of 1978 or Act 9 of 1989 . regarding the allegation that he used his position as Tax Collector to receive tax certification fees which were not authorized in law. Grogan has served as the elected Tax Collector since 1959 and has collected real estate and per capita taxes for Moon Township and Moon Area School District. The fees which .Grogan could collect as Tax Collector were delineated by Moon Township through resolutions and by the school district through setting compensation as set forth in Fact Findings 4 and 6. Neither the township nor the school district prior to 1991 authorized Grogan to charge and receive tax certification fees. During his years of service as Tax Collector, Grogan provided tax certifications to abstract companies, banks, attorneys ana individuals who requested official statements as to whether re+tl estate taxes were paid as to specific properties. . From the late 1970's Grogan charged a $5.00 fee for such certifications which h4 raised to $10030 sometime prior to 1988. Although there 'site Ala official approval prior to 1 for Grogan to charge for tithe Certifications, the Township Commissioners and Managers knew ti�iat Grogan was issuing tax certifications, when requested, and charging a fee for such services. Grogan states that issuing tax certification fees is not a requirement of his position and that it is a service which he provides. The majority of the tax certifications are prepared by Grogan although on occasion some certifications are prepared by his wife Grogan, 91- 0:35 -C; 94- 069 -C2 Page 10 or part -time employees. The process for a tax certifica entails obtaining tax information for a three year period, rsdUditg that inforrtat on to written form, reviewing the *otk if no't dond personally and transmitting that tax informations& td t party ONO initiated the request. - Prior to June, 1989 which is the date of e% ad'ts esrt df•Arc t 4 of 1989, Grogan received various tax certifications feed, &Fom 'rune, 1989 until October, 1990, Grogan received addL.tidnal. fist certification fees. In that latter time period, GVicogtan reselEded approximately $5,940'.60 in tax certification fees. teat finding 15. After October, 199'0 when Grogan became aware of 4 Commiseid'n ruling involvi tig ai tax collector; he discontinued tit. pract gee -Of charging fees for' tax certifications. Thereafter, by 'olydlrnaterne esf July 17, 1991, *dons Township did authorii'e thet Tax Collect r, tth charge for tax ce''rtificartidn fees. J' The frndigst reflect that between 1986 and November' 1990, Grogan was t aaaare and was not advised that collecting a fee tax certifi- dati4rra without ordinance was unauthorized comparldation Grogart did aot in good. faith. Lastly, there 141 to legal mandate for a Tax Collector to issue three year tax' eery. fidatioYis. In applying the provisions of Section 3(a)' of Act 170 of 1978 and Ade- 9 of 1989 to the above facts, we must determine whether there was use of office on the part of Grogan to obtain a financial gain or a private pecuniary benefit for hiiSelf as to the fees he collefcted, far- t=ax certifications. It is clear that there wag a use of authority of office on the part of Grogan in that he, iy virtue of. his posi=tion of -elected Tax Collector, do`as able t6 exact theseY fees foz tax certifications. Jiili:anzte, O•f$ef St)l. The tait cettification fees went to Grogan himself and >ieded the fees were' pe'dinniary benefit: $owever, the question befdfe ud is Whet the pecuniary benefit received by Grogan was unaltthdfiged its law azzd private. In order to make that determination, we must review both statutory and dedisional law on this isdiie. The Local Tax Cbllec Lion Lana of 1945 P.L. 1950, Secti6n 35, as amended, 72 P.S. 5 f1.35: "The tax collec=tor in borough and townships of the second class_ 'shall receive, • as dompexsatior far "Glee collection of county, institutio=n didtridt, bdedi h and township taxes, salary, wages Of a doamiise'i•bn d11 121i ditelh taxed to be fixed. by ,the respective t Along adtlsdf Tties levying such taxes, not exceeding fir per ceattlis di " tz$ie annouat dbliected. In the case of school distridt. tweet, the commission 5z compensation of the tam doil4dtef. be determined bjr the board of sehOoi cli €edt atfi, &lid the total cost of such col1eebion shell fapai'ted, altaall to the Superintendent of Public Irittil tion," ani.t d�3d11 Te Grogan, 91- 035 -C; 94- 069 -C2 Page 11 published in his report. For the collection of county, institution district, school district, borough and township taxed, the tax collector shall be allowed by the respective taxing authorities, actual and needful expenditures for printing, postage, books, blanks and forms." The above provision of law does allow compensation to a tax collector - consisting of a percentage commission collected plus certain allowed expenditures. Nowhere does the law allow for charging .for tax certifications. Unless tax certification fees are provided' for by law, a tax collector may not receive such a financial gain or private pecuniary benefit. The concept that a tax collector may only receive compensation which is legislatively provided is well rooted in decisional law. See ,Rachael v..Forest Hills School District, 94 Pa. Commw. Ct. 130, 503 A. 472 1986: "...the right of a tax collector to receive the compensation annexed to his office is legislative, not contractual. Tarner v. Chambersbura Borough School District, 338 Pa. 417, 12 A.2d 106 (1940) . Further, this -Court has stated, in dealing with a'state statute, that when a provision oan be interpreted to benefit either a private party or the Commonwealth, it must be presumed that the. legislature . intended to favor the pubiio interest." Id. at 476. A tax collector may not charge any fee unless it - is specifically provided for by law. In Brown v. LeSuer, -148 Pa. Super. 192, 27 A.2d (1942), the mortgage holder of certain realty sought to pay the liens, including a 5% penalty, to prevent foreclosure. When the tax collector refused to accept the payment unless an additional 5% fee was-paid to her as her commission, such payment was made under protest followed by a civil action to recover the 5% fee. The trial court found in favor of the mortgagee and the tax collector appealed. The Superior Court affirmed, holding that the tax collector had no authority to charge sro, a fee due. to-the-lack of statutory. authority: "It is well settled that one who demands payment of a tax must show statutory authority for the imposition and collection of the tax: Central Penna Lumber Co.'s App., 232 Pa. 191, 193, 81.A.204; Schmuck v. Hartman, 222 Pa., 191, 195, 70 A. 1091; and: the - principle applies equally well. to one who seeks to collect a fee, commission or charge from the taxpayer for his services in effecting the collection of a tax lawfully imposed. Unless statutory authority for the collection of such Grogan, 91- 035 -C; 94- 069 -C2 Page 12 fee, commission or charge from the taxpayer is shown he cannot be required to pay it: Com. v. Scott, 88 Pa. Superior Ct. 68, 71, reversed on another point in 287 Pa. 302, 135 A.225 % . A practice, even though long established, of collecting such unauthorized fee, commission or charge will not make it legal: Layrencg Count► v.. Horner, 281 Pa. 336, 342, 126 A.783." Id. at 195, 196. Therefore, based upon the above, it is clear that they pecuniary benefit received by Grogan was private and unauthorized in laW s0 that a technical violation of Section 3(a) of Act 170 of 1978 and Act 9 of 1989 occurred. We rote that our decision in this case follows our prior prdtedent in Allen, Order 612 -R, wherein we determined that a tax collector violated Section 3(a) of Act 170 of 1978 when he received ta3c certifications which were not authorized in law so as to be a fiitandial gain other than compensation provided for by law. See also Thl, Order 919. Turning to the matter of restitution, we note that CommonWealth Court in Rebottini et al v. State Ethics Copmtps Pa. Commw. Ct. 634 A.2d 743 (1993), held that this Commission has no power to impose restitution as to violations under Act 170 of 1978. In light of the foregoing, restitution may be imposed as to Act 9 of 1989 violations only. In this case, the record reflects that the tax certification fees received by Grogan from June 26, 1989 through December 31, 1990 amounted to $5,960.00 Fact Finding 18. The parties in this case have entered into a consent agreement for a technical violation as well as a restitution payback of $2,000.00. Since the parties have contractually agreed as to the appropriate amount of restitution and since our review of the case re€leets that such amount Appears to be a fair and appropriate restitution figure, we accept the restitution figure of $2,000.00 and direct Grogan to make restitution of that amount within thirty (10) gays as per the agreement of the parties. We also believe that the 'consent agreement is a fair and appropriate disposition in the case noting that Grogan was unaware and wet -never advised ' that collecting the fees _were_ authorized Grogan acted in goon. faith in that he performed much -work as a service in that tart ter tL 4.cation fees are . not regn2r d by law- ftempllauct with this ixrder by timely making the westiintion paymeht wi11 result in the closing of the +c arse w .th .era inaxther attionl ieiiure tb comply w .10. riesullt in the antai'tUttri:nn Iasi an corder en ferbifte nt le ttb . Grogan, 91- 035 -C; 94- 069 -C2 Page 13 IV. CONCI,IISIONS OF SAN: 1. Martin Grogan as the elected Tax Collector in Moon Totanahlp, Allegheny County, is a public offictial ati23j eat tO the provisions of Act 170 of 1978 and Act 9 of 1989. 2. A technical violation of Act 170 of 1978 and Act 9 Of 1989 occurred when Grogan used the authority of office to obtain a financial gain or private pecuniary benefit consisting of tae certification fees which were not authorized by the township or school district. In re: Martin Grogan File Docket: Date Decided: Date Mailed: ORDER NO. 972 91- 035 -C;_ 94- 069 -C2 05/04/95 05/16/95 1. Martin Grogan as the elected Tax Collector in Moon Township, Allegheny County, technically violated Act 170 of 1978.and Act 9 of 1989 when he used the authority of office to obtain a financial gain or private pecuniary benefit; consisting of tax certification fees which were not authorized by the township or school district. 2. Grogan is directed within thirty (30) days of the date of this Order to pay restitution in the amount of $2,000.00 through this Commission payable to the order of Moon Townshi ? Allegheny County. mow: a. Compliance with the above will result in the closing 414 this matter with no further action. h. Failure to comply with the above will result in the initiation of an order enforcement action by this Commis ion. BY THE COMMISSION, DANEEN E. REESE, +CHAIR