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972 Grogan (2)
In re: Marti'n.. Grogan STATE':ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 1712 Before: File Docket :. Date Decided: Date Mailed: 91-.035 -C; 94.- .069 -C2 05/04/95- Dhneen. E Reese.,, Chair: Austin M'., Lee, Vice Chair, Ray W. Wilt_ Boyd E. Wolff 08716/95 The Investigative Division of the State Ethics Commission . c nducted 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 constituted 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. Code §2.38 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 Ehics Law is guilty of a misdemeanor subject to a fine of not ware than $1,000 or imprisonment for not more than one year, 65 P.A. . 5409(e).. Confidentiality does not preclude discussing this case ;tb a 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 Mot of 1978) when he 'used 'the authority of his office to receive compensation not provided for by law in the form of keep jfor the issuance of tax certification letters. Section 3. Restricted Activities. ,(ai No public official or public employee shall \ use 4iis public of floe or any confidential information received through his holding •public office to obtain financial gain other then compensation provided by law for himself, t o 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 Colieatpr foc_Moon Township, Allegheny County, violated the following provisions of the State Ethics Act (Act 9 of 1989) when heeharged'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 constitlates a conflict of interest. 65 P.S. §403(a). Section 2. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority, of his office o employment or any confic}e40.41 . information received through his holdint public off_ics or employment. for the private: pecuniary; benefit_ of himself„ a member of trig, immediate family ar a business with which he or a member of his immediate family is assoccat -ed.. "Conflict "' o "camtlict of interest" does- not: include. an action having Gam,: 91i:- 03'S -C; 94.r 0A2-C2 Page - : 3! a'. dea arinixai w ecoactzlic impact or wihi.ch affects tn. , tiffs:: same degree: a ci,, 0(4104% sting of, the genera•1° public or. a subs -�,a cpns .stop . ?f� an intiuntny,: occupat ion. o ob r- group which includes■ the pub' ji:c o f emprroy; a e:, . a. member of his a li: o a business' with wb4,ch he or a. mepnbe .. , his imaredia+te. family is assoolatedi. 65 B.. 5.., 1402.., 11 . =UMW= tNGS' 1. Martin Grogan has served as tb.e. elected Talc_ Co,7,,lectc� Township, Allegheny County, since 1959. a. Moan Township is a Second Class Township. 2. Grogan' s duties as a Tax Collector included colle►at' o f R aal Estate and Per Capita Taxes for Moon Township t g p (�'ow�>ithi:�) auk Moon Area School District (School District), 3. Grogan's compensation as Tax collector is set by both tLe Township and. School District. 4. Moon Township set the tax collector's compensation in OA for of resolutions as follows: a. Resolution R -12 -1985, adopted February 13, 1985, cprsrs£1 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` 2.. expenses are to be provided at the tax coii expense. ��or's b. Amendment to R -4 -1986, adopted June 11, 1986, authorized the tax collector to receive office expenses toSi.Ang $6,000.00 annually to facilitate the smooth operation p? the tax office. c. Resolution R -15 -1989, adopted February ,8, 1989, cagelF r the period January 1, 1990, through December Al, 1991; included the approved compensation of $2040044; annually for the collection of real estate, and .er capita taxes, $6,000.00 for office expenses, and S% collection fees. The Township is to provide all Surety Bonds; office space utilities; forms; and necessary postage. The tax collector is responsible for phone Grogan, 91- 035 -C; 94- 069 -C2 Page 4 expenses. 5. Moon Township provided office space at no cost to Grogan from 1959 until 1993. a. No other form of compensation was approved by the Township. 6. Moon Area School District Board of Education appointed Martin Grogan as Tax Collector and set compensation as follows: a. June 26, 1986: Martin Grogan, Moon Township Tax Collector, appointed one of the collectors of Delinquent Real - Estate Taxes and Delinquent Per Capita Taxes for the school district. Tax Collectors' commissions are fixed as follows: 'June 15, 1987: Martin Grogan appointed as Delinquent Real Estate and Per Capita Tax Collector. Rate of compensation for the collection of non - liened real estate taxes shall be. 5% of such taxes collected. after June 30th of any current fiscal, year, with the exception of cases where the services of a solicitor for a fee are involved, in ,which cases there shall be no commission., A ceiling of mama() in commissions in any fiscal year was set Tow Q U.$Qtor commissions sit as f l,Zows,:: the amount of $9,50d'. i40 in tb 338 a.988' fiscal. year, with an a:r,kowa e of $i5 ," 5 m.O Q'. for office expoasom,, payable_ in. twelve equal i;ns ta.ilmonts:.. Zo dan Tax Serrates appointed D inquent Real,. Eatat ' Tax Collector c. June , 19 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. Grogan,. 91-07S-C) 94- 069 -CZ Page 5 d. June 18 19 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 1 -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 regests for tax certification increased and became a requirgme4g or real estate closings. b. .A fee of $5.00 was established in the late 197,0's. 1. Grogan established that fee at someoe else's suggestion. c. Sometime prior to 1988 Grogan increased the fee to $10.00. d. Grogan did discuss the fee with the former township solicitor. e. Grogan asserts the certifications were provided as a Grogan, 91- 035 -C; 94- 069 -C2 Page 6 service not as a requirement of his position. 9. Prior to 1991, there was no official approval in the form of an ordinance or resolution authorizing or approving the certification fees .charged by Grogan but the Township Commissioners and /or the Township Managers knew that the Tax Collector did issue tax certifications when requested to do so and did charge a fee. 10. Grogan's tax office is staffed by Grogan, ills wife, and one part -time employee on an as needed basis. 11. The majority of tax certifications are prepared by Grogan. a. Certifications prepared by Grogan's wife or the part -time employee were reviewed and approved by Grogan. b. Grogan estimated that certifications took approximately thirty minutes to complete. c. On Qeeasion these were requests which took longer to completes 12 The process for providing a tax certification by Grogan included the following; a. Obtaining tax information for a three year period; b. ReduQifg that information to a written form; c, Revie-wing Welrk not personally done; and 4, i#igaing , m8,ili i or in some other way preparing for dellv$Vy. 141 T4A @eaAi f ig4tten 8'eg4rda waiatained by Martin Grogan reflect tho fgllgwing geStifiga.tiona were issued and paid for between Januay, 1986, and 41,11 1 1991: Year # Tsaued # Paid For Amount Received 1986 415 344. - $3,840.00 1987 410 400 $4,000.00 1988 358 343 $3,430.00 1989 373 358 •" $3,580.00 1990 413 4QQ $4,000.00 1991 None Prior to July 0 - TOTAL 1,969 1 $18,650.00 14. Tax certi.fie_atieas issued and fees received by G , by gXgind, 91 =69$aet 94- 069 -02 •ay'4 1 period, gram &tine, 1968, to July, 1991, are a, b , d, di Year # Paid For 6/i0/88 is 12/31/88 1/1/89 to 6/2$/89 6/26/89 to 12/31/89 1/1/90 to 12/31/90 178 162 196 400 as follows: Amount Received $1,780.00 $1,620.00 $1,960.00 $4,000.00 $9,360.00 15. Yco 'Rine 26, 1989, through December 31, 1990, Martin Grogan teceived a total of $5,960.00 in the for of tax Certificattion:a . 16. Zn 19atOber, 1990, Grogan became aware of a State Ethics COMmission 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. Hawed on that decision, Grogan discontinued issuing certifications for the three year period. 17. In July 17, .1991, the Moon Township Board of Supervisors approved Ordinance #385, 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 on or before the last day of each month. This $5.00 flat fee may be 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 b. 1990: $4',000.00 $,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. IFi this regard, Section 9 of Act 9 of 1989, P.L. 26, pro tides, in pate, as follows: This amendatory at shall not apply to violations committed prior to the _effective date of this act, and causes of action 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 ptsrpoaes of this section, a violation was committed prior to the effective date of this act if any eleients of the violations occurred prior thereto. Under both Act 170 of 1978 and Act 9 of 1989, Martin Grogan, hereinafter Grogan, as a steal Estate Tax Collector inModd Township, Allegheny County, is a public official as that term is defined under bout, acts. See also 51 Pa.` Cods.` AA etioh, his conduct is subject to the provisions - of both laws and the restrictions therein are applicable to him. Grogan, 91 94-'069=t2 Page 9 Under Section 3(a) of Act 9 of 1989 quoted above, a public official shall hot engage in conduct that constitutes a conflict of interest. The test "conflict of interest" is defined in the allegations. Under Section 3(a), of Act 170 of 1978 quoted in the allegations, this Commission has determined that use of office by public official to obtain a financial gain for himself or a ►ember of his immediate family or a business with which he is &tStociated 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. State 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 ou1d prohibit a public official /employee from using public office to advance his own financial interests; Koslow v. State Ethici Commission, 116 Pa. Commw. Ct. 19, 540 A.2d 1374 (1988) The issue before us is whether Grogan violated either Section 3'(a) 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. d � . The fees which .Grogan could collect as Tax Collector were elineated 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 ani individuals who requested official, statements as to whether real estate taxes were paid as to specific properties. From the laxte 1970es Grogan charged a $5.00 fee for such certifications whisk h% raised to $10.00 sometime prior to 1988. Although there 'wae did official approval prior to 1991 . for Grogan to charge for tit* cef'tjfications, the Township Commissioners and Managers knew flint 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 occadion 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 certi£fication entaails obtaining tax information for a three year period, redudittgE that information to written form, reviewing tie Ito `k if =it done personally and transmitting that tax informatiod& US the party WACO initiated the request. "Prior to June, 1989 which is the date of entadtMesrt df kat 9' of 1989, Grogan received various tax certification' tiros, ]ero= „rune, 1989 until October, 1990, Grogan received additidnal. tax certification fees. In that latter time period, cfogaaa reaelded approximately $5,964.00 in tax certification fees. tadst finding 15. After October;- 199'0 when Groged became aware of a} Commieei ruling involving a- tax Collector; he discodtinued t praoti:ce - df charging fees for' tax certifications. Thereaf teV, by 'ordi natide asf July 17, 1991, Sidon Township did autl orife the Tax C ttS! charge for tax certification fees. The findingsi reflect that between 1986 and NoVem t 1094', Grogan was tYnazeire and was not advised that cc11ecting a fee troig tax eertifi- ati -cdme without ordinance was unauthorirzed compecieation. Grogan cad act in good. faith. Lastly, there i:e no ].egad Mandate for at Taac Collector to issue three year tax certi,fidatio's. In applyi.i g the provisions of Section 3(a) of Act 170 of 1978 and Add 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 himself as to the fees he collected: far- tax certifications. It is clear that there was a use of authority of office on the part of Grogan id that 12e, by virtue of. his position of - elected Tax collector, was able t6 egadt these fees for tax certifications. Ofdef 84 §. 'l'he to certification fees went to Grogan himself and edee the fdes were" a pee�uniary benefit: However, the questi ] on befate Ve is *Yet the pecuniary benefit received by Gsogas was uniithdfised in law add private. In order to make that determination, we must review both statutory and decisional law on this iseiie. The Local Tax Collection Law of 1945, P.L. 1A50, Secti6n 35, is amended, 72 P.S'..5511.35: The tax collector in boroug!!S and towmsl1ips of the second class. 'shall receive, - as dompe tati©x for 'Gee collection of county; institution diatf.iOt, liOirough add township taxes, - salary, wages df &d adofrarseiad On ail sh taxes to be fixed. by ,the respective taming atiftkorigida levying such taxes, not exceeding fiVe fire per Cerittiln €f" tiie a:noun -t db1iected. In the case of school distridt taxes, tYie commission Or compensation of the 'tam dolle4Of Beall be determined by the board of sdfiddl cli €ecltefe, and the h total cost of such c"olledti c5n shell be fepotted, to the Superintendent of Public In§tiildtidn, and •shell 3e 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 taxes, 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 counpansation 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 La. Commw. Ct. 130, 50.3 A. 472 1986: "...the right of a tax collector to receive the compensation annexed to his office is legislative, not contractual. Tamer v. Chambersburg 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 can be interpreted to benefit either a private party or the Commonwealth, it must be presumed that the legislature intended to favor the publid interest." Id. at 476. A tax collector may not charge any fee unless it }.s specifically provided for by law. In Brown v. LeSuer, 143 Pa. Super. 192, 27 A.2d (1942), the mortgage holder of certain really sought to pay the liens, including a 5% penalty, to prevenb 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 sue, 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 Abp., 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 Ea. 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 the pecuniary benefit received by Grogan was private and unauthorized in iaW SO that a technical violation of Section 3(a) of Act 170 of 1978 and Act 9 of 1989 occurred. We note that our decision in this case follows our prior precedent in Allen, Order 612 -R, wherein we determined that a tax collector violated Section 3 (a) of Act 170 of 1978 when he received talc certifications which were not authorized in law so as to be a financial gain other than compensation provided for by law. See a1sb The, Order 919. Turning to the matter of restitution, we note that CommonWealth Court in Rebottini et al v. State Ethics Conmijsion, _ 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 +i`une 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 ae a restitution payback of $2,000.00. SiAce the parties have contractually agreed as to the appropriate amount of restitution and since ' o ur review of the case reflects that such amount appears to be a fair and appropriate restitcut figure, we accept the restitution figure of $2,004.00 and direct ce'ct Grogan to make restitution o f that amount within thirty ( 0:) 'days 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 wars never advised that collecting the fees _were rumauthorlsed. Grogan acted in gooa faith in that he performed such. -work as a service In that tart certification fees are . not required by law.. Coltpl.iauce with this order by timely making the ceetti'tstiion pant will result In the closing of this came 'wath .n,a Szwrthar attibtl teilitre tt comply win. siesuit In the ani'tia"ta:on ot an corder entortidnent 4Witi n,. Grogan, 91- 035 -C; 94- 069 -C2 Page 13 IV. CONCLUS]ONS OF LAW: 1. Martin Grogan as the elected Tax Collector in Moon 7 otanathip, Allegheny County, is a public offidial stthjee t 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. s. Compliance with the above will result in the closing of this matter with no further action. ba. Failure tO comply with the above will result in the initiation of an order enforcement action by this Commission. BY THE COMMISSION, A ywy,u6 81,Le DANEEN E. REESE, +CHAIR