HomeMy WebLinkAbout1345 FrazerIn Re: David Frazer
File Docket:
X -ref:
Date Decided:
Date Mailed:
Before: Louis W. Fryman, Chair
John J. Bolger, Vice Chair
Donald M. McCurdy
Paul M. Henry
Raquel K. Bergen
03 -037
Order No. 1345
9/20/04
10/1/04
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission conducted
an investigation regarding a possible violation of the Public Official and Employee Ethics
Act, Act 93 of 1998, Chapter 11, 65 Pa. C. S. § 1101 et seq., by the above -named
Respondent. At the commencement of its investigation, the Investigative Division served
upon Respondent written notice of the specific allegation(s). Upon completion of its
investigation, the Investigative Division issued and served upon Respondent a Findings
Report identified as an "Investigative Complaint." An Answer was filed and a hearing was
waived. The record is complete. A Consent Agreement and Stipulation of Findings were
submitted by the parties to the Commission for consideration. The Stipulation of Findings
is quoted as the Findings in this Order. The Consent Agreement was subsequently
approved.
This adjudication of the State Ethics Commission is issued under Act 93 of 1998
and will be made available as a public document thirty days after the mailing date noted
above. However, reconsideration may be requested. Any reconsideration request must be
received at this Commission within thirty days of the mailing date and must include a
detailed explanation of the reasons as to why reconsideration should be granted in
conformity with 51 Pa. Code § 21.29(b). A request for reconsideration will not affect the
finality of this adjudication but will defer its public release pending action on the request by
the Commission.
The files in this case will remain confidential in accordance with Chapter 11 of Act
93 of 1998. Any person who violates confidentiality of the Ethics Act is guilty of a
misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than
one year. Confidentiality does not preclude discussing this case with an attorney at law.
Frazer, 03 -037
Page 2
I. ALLEGATION:
That you, David Frazer, a (public official /public employee) in your capacity as a
Commissioner for Upper Allen Township, Cumberland County, violated Sections 1103(a)
and 1105(b)(5) of the Public Official and Employee Ethics Act (Act 93 of 1998) when you
used the authority of your office for a private pecuniary gain by completing healthcare
benefits application and then directing township employees to process the application so
that you and your immediate family could receive health benefits at township expense
without approval of the board of commissioners; and when you participated in actions of
the board to approve payments for health benefits; and when you failed to disclose all
sources of income in excess of $1,300 annually on forms filed for calendar years 2000 and
2001.
II. FINDINGS:
1. David Frazer has served as an Upper Allen Township Commissioner since January
3, 2000.
2. Professionally Frazer was employed as the Executive Director of the Harrisburg
Area Community College's Public Safety Center from approximately March 30,
1998, until his resignation effective August 31, 2000.
a. Prior to 1996, Frazer was a career officer in the United States Air Force.
b. Upon his retirement from active duty in 1996, Frazer was employed as the
assistant manager and manager of Upper Allen Township from 1996 to
1998.
c. Frazer has been employed by the American Heart Association since April
16, 2001.
d. Frazer was employed by Eastern Builders Materials Dealers Association
from September 2000 through March 2001.
3. Upper Allen Township offers health, vision and dental coverage to township
employees.
a. Prior to August 2000 no township commissioners participated in the
township's insurance plans.
b. Insurance coverages are provided to township employees at township
expense as an employee benefit and form of compensation.
4. Upper Allen Township Commissioners' compensation and benefits are governed by
applicable provisions of the First Class Township Code.
5. On or about August 22, 2000, Frazer discussed with Township Manager Louis
Fazekas coverage under the township's health, vision and dental insurance plans
for himself and his family.
a. At that time, Frazer was changing employment and desired healthcare
coverage for his family and himself.
6. Frazer requested Fazekas to determine whether it was permissible for him to
participate in the township's health care plans at township expense.
a. Fazekas determined it was permissible for Frazer to participate in the plan.
Frazer, 03 -037
Page 3
7. Neither Fazekas nor Frazer contacted the township solicitor for advice on the
matter at the time of Frazer's inquiry.
8. Fazekas provided Frazer with enrollment applications to be included on the
township's health, vision and dental coverages.
a. Frazer completed enrollment /change applications for Health America,
Capital Blue Cross /Blue Shield and Vision Benefits of America on August 22,
2000.
b. Health America provided medical insurance benefits for township employees.
c. Blue Cross /Blue Shield provided dental insurance benefits for township
employees.
1. Dental premiums were also invoiced under the Capital Regional
Insurance Trust.
d. Vision Benefits of America provided vision insurance benefits for township
employees.
9. Frazer returned his applications directly to the township's bookkeeper to be added
to the township's coverages.
a. Frazer was added to the township health insurance plans as a result of his
submission of the applications.
10. The Upper Allen Township Board of Commissioners did not take any action in
August 2000 authorizing Frazer to participate in the township's health insurance
plans.
a. Neither Frazer nor Fazekas were aware board action was required.
11. Frazer completed an enrollment /change form for Health America HMO health
insurance with family coverage on August 22, 2000.
a. Coverage was for Frazer, his wife and two children.
b. The application was signed by David Frazer.
c. The effective date of the coverage is listed as September 1, 2000.
12. Frazer completed an application for enrollment for Capital Blue Cross /Pennsylvania
Blue Shied dental coverage on August 22, 2000.
a. Coverage was for Frazer, his wife and two children.
b. The application was signed by David Frazer.
c. The effective date of the coverage is listed as September 1, 2000.
13. Frazer and members of his immediate family participated in the Upper Allen
Township health, dental and vision plans from September 1, 2000, until September
1, 2001.
a. As a retired Air Force Officer, Frazer and his family, at all relevant times,
were eligible for health, dental and vision benefits available to families of
retired members of the United States Air Force.
Warrant
Date
Warrant
Total
Vision
Health
America
Capital Blue/
Capital Region
Insurance Trust
09/21/00
',616,283.36
',436.50
',5,942.29
',19,555.50
10/19/00
$402,126.91
$425.44
$5 942.29
$5,290.56
$20,648.30
11/16/00
$236,225.11
$425.44
$5,290.56
$19,285.40
12/19/00
$362,412.06
$447.56
$6,594.02
$21,329.75
01/18/01
$115,691.24
$436.50
$5,942.29
$22,832.55
Frazer, 03 -037
Page 4
b. Frazer's effective enrollment date of September 1, 2000, coincides with the
termination of his benefits at HACC.
c. Frazer also received benefits through Upper Allen Township during the
period of April 2001 through September 2001 while employed by the
American Heart Association.
d. Frazer had declined benefits from the American Heart Association where a
25% premium co -pay would have been required for health and dental
coverage and 100% of vision coverage.
d. Frazer had no premium co -pay obligations for the Upper Allen Township
benefits.
14. Upper Allen Township is invoiced on a monthly basis for health, dental and vision
coverages provided to plan participants including Frazer.
a. Frazer is specifically identified by name on Blue Cross /Blue Shield and
Health America invoices.
b. Vision Benefits of America invoices list total numbers of plan participants.
1 Plan participants increased by one effective with Vision Benefits of
America's September 2000 billing.
2. No new township employees were hired at that time.
15. Payments for township provided health insurance coverage are approved by the
Upper Allen Township Board of Commissioners.
a. Premium payments due are included as part of monthly warrant lists.
b. Warrant lists are provided to township Commissioners for review
approximately one (1) week prior to their monthly meeting.
c. Warrant lists are voted on in their entirety by a single motion.
16. Upper Allen Township warrant lists provided to township commissioners include an
itemized breakdown of all invoices to be paid including those for vision, dental and
medical coverages.
a. Specific plan participants are not listed on the warrant list but are included
as part of the actual invoice.
17. Upper Allen Township warrant lists covering the period September 21, 2000,
through December 19, 2002, include the following invoices for vision, health and
dental coverages for all plan participants including Frazer.
Warrant
Date
Warrant
Total
Vision
Health
America
Capital Blue/
Capital Region
Insurance Trust
02/15/01
',377,143.95
',452.72
',8,333.55
',20,222.10
03/13/01
$155,930.25
$441.66
$8,333.55
$20,810.90
04/17/01
$771,424.29
$441.66
$3,772.55
$19,108.95
05/17/01
$155,887.41
$441.66
$6,053.05
$19,666.35
06/21/01
$784,471.26
$441.66
$6,053.05
$19,563.20
07/19/01
$241,305.00
$441.66
$6,053.05
$16,513.79
08/16/01
$265,740.73
$452.79
$7,030.85
$19,563.20
$16,513.79
09/20/01
$781,324.22
N/A
$6,541.95
N/A
10/18/01
$388,939.05
N/A
$6,541.95
N/A
11/15/01
$252,495.95
N/A
$6,541.95
N/A
12/20/01
$469,309.41
N/A
$3,419.40
N/A
07/18/02
$466,341.65
Jones, Daly
Coldren Assoc
$74.14
12/19/02
$468,889.88
Jones, Daly
Coldren Assoc
$70.00
Frazer, 03 -037
Page 5
18. Township warrant lists which contained payments for health benefits were approved
on a monthly basis by the Township's Board of Commissioners, including David
Frazer.
19. Upper Allen Township invoices for insurance benefits from Health America, Capital
Blue Cross, Vision Benefits of America, Capital Region Insurance Trust and Jones,
Daly, Coldren Associates confirm that the township paid $11,110.96 for insurance
benefits for Frazer between September 2000 and December 2001.
a. Between January 1, 2001, through August 31, 2001, these benefits totaled
$5,741.95.
20. The issue of Frazer's receipt of township provided insurance benefits was
addressed in correspondence by the township solicitor William Miller on October
10, 2000; December 12, 2000; and July 9, 2001.
a. Each opinion letter related specifically to Frazer's receipt of township
provided insurance benefits.
21. Solicitor Miller's correspondence dated October 10, 2000, included the opinion that
the commissioners may participate in Township's health insurance plans at
Township expense."
a. Although Solicitor Miller's letter suggested that the adoption of an
authorizing ordinance would be the most prudent course of action for the
township to take, the letter did not give an opinion that it was necessary for
the Board of Commissioners to pass an ordinance specifically authorizing
said benefits.
22. Solicitor Miller reiterated his previous advice to the board of commissioners on the
health insurance issue on December 12, 2000.
23. Solicitor Miller provided a subsequent opinion on July 9, 2001, as a result of a
March 9, 2001, Audit Report from Waggoner, Frutiger & Daub the township's
auditors. As a follow -up Attorney Miller informed the board:
a. We had previously advised the Board of our position
Frazer, 03 -037
Page 6
on this issue by letter dated 12 December 2000, a copy of
which is enclosed. It is our recommendation that the Board of
Commissioners adopt an appropriate resolution in order to
continue making payments for health insurance for
commissioners. In the event a resolution is not adopted, then
payments for Commissioner's health insurance must terminate.
In light of the auditors' comments, we believe it is not prudent
to make any such payments unless there is authority on the
record to do so. Accordingly, enclosed is a draft resolution
which could be adopted by the Board which would permit the
township to provide health insurance benefits to the
commissioners."
b. The board of commissioners took no action on Solicitor Miller's
recommendation.
24. Frazer discontinued receipt of township paid health insurance benefits as of August
31, 2001.
25. On November 1, 2001, Manager Fazekas issued a memo to Frazer informing him
that Frazer could continue coverage for up to thirty -six (36) months, November 1,
2001, through November 1, 2004, at Frazer's own expense.
a. Fazekas provided Frazer with the following monthly premium amounts:
Company Coverages Amount
Health America Health $ 624.51
Vision Services of America Vision $ 11.06
Penn Dental Dental $ 59.51
$ 695.08
b. Frazer signed a letter declining the continuation of benefits dated November
1, 2001.
26. Frazer completed termination of coverage paperwork for Capital Blue Cross/
Pennsylvania Blue Shield and Health America on November 6, 2001.
a. The effective date of Frazer's termination of benefits was listed as
September 1, 2001.
27. The professional services of Waggoner, Frutiger & Daub, Certified Public
Accountants, 5006 East Trindle Road, Suite 200, Mechanicsburg, PA 17050 -3647
have been utilized by Upper Allen Township to perform annual township financial
audits since at least the late 1990s.
a. Waggoner, Frutiger & Daub issued a five page audit report on March 9,
2001, with findings related to the township's 2000 calendar year finances.
28. Waggoner, Frutiger & Daub audit findings for calendar year 2000 had a specific
finding related to their audit of payroll and employee benefits. Audit finding number
10 titled "Approval of Personnel Matters" includes the following reference to a
commissioner's receipt of township paid health benefits:
a. "During our audit of payroll and employee benefits, we found
that one new Township employee nor his wage rate were not
approved in the board minutes or included on the approved
2000 salary schedule. The Township also paid health insurance
for a commissioner for the first time, however, the township
Frazer, 03 -037
Page 7
has no written policy regarding the payment of health
insurance for commissioners nor was there any formal
approval in the board minutes. These types of personnel
maters [sic] have historically been approved by the board and
included in the board minutes. We would recommend that
these specific personnel matters be considered for approval in
the board minutes for 2001, and made retroactive to the
payment starting dates in 2000."
29. Minutes from the township's June 19, 2003, meeting included the following
discussion and action on Frazer's receipt of township insurance benefits:
a. "Commissioner Allison made a motion that, based upon the
auditor's findings in the 2001 Audit Report, the proper
township officials be directed to provide the members of the
board of commissioners with information related to the
issuance of health benefits to a commissioner, and that this
information be completed and provided to the board of
commissioners no later than the July 8 work session meeting
for final determination by the Board of Commissioners.
Seconded by Commissioner Anderson. Roll Call: President
Lewis, Vice President Frazer and Commissioners Allison and
Anderson voted yes; Commissioner Stathas abstained."
30. During an executive session of the Upper Allen Township Board of Commissioners'
July 9, 2003, work session the board discussed Frazer's receipt of township paid
medical coverage.
a. No action was taken by the board to approve the benefits.
31. Frazer submitted a memo dated July 16, 2003, to acting manager Richard Laskey
outlining Frazer's version of how Frazer came to receive township paid health
benefits. Frazer's July 16, 2003, memo offered the following explanation:
a. The purpose of this Iettec. is to address concerns raised by Commissioner
Allison at the June 19 Executive Session and subsequent motion,
seconded by Commissioner Anderson to conduct a "fact finding report" on
health benefits provided by the township to myself. I hereby provide (as
suggested by Solicitor Miller on 7/9/03) voluntary information (but reserve all
rights).
In August 2000, I approached Township Manager /Health Plan Administrator
Lou Fazekus and requested that he research appropriate regulations and
other township's practices to determine if a commissioner is eligible for
health benefits. He researched and told me that due to recent passage of
State Law (reference Solicitor Miller's October 12, 2000; December 12,
2001 & July 9, 2001, memos) that commissioners were eligible. I asked him
what do I need to due [sic] to apply. He provided me with an application and
instructions to complete and to submit the application to him. I again asked
him "am I eligible." He responded, "yes." I made application on 9/1/00. Mr.
Fazekus approved the application and enrolled me into the township health
benefits program. At no time was there any discussion about the board of
commissioners having to approve. In my view, I made application with the
health plan administrator and was an eligible "employee /elected official" of
the township in accordance with 53 P.S. 56562. I did not receive any
instruction from the health plan administrator that I was not eligible, on the
contrary, he told me I was eligible and accepted /approved my application. At
no time did I apply any "pressure or misuse" of my position in this process.
Frazer, 03 -037
Page 8
At the time of making application, I was eligible for an [sic] had the options of
health benefits from my then current employer. I chose not to accept that
employer's plan and to apply for the township plan. On November 1, 2001,
my coverage with the township was cancelled. On November 1, 2001, I also
received written notification from Mr. Fazekus that my enrollment was
cancelled and that I was eligible for continuing health care coverage by the
township under public law 99 -272.
Solicitor Miller and the Auditor's [sic] have recommended, since the township
has no written policy that the township adopt a retroactive resolution
formalizing health benefits for commissioners."
32. Prior to December 9, 2003, the Township Commissioners had not established by
resolution, policies for payment of benefits and prerequisites to and on account of
Commissioners.
a.
Commissioner Lewis made a motion to adopt Resolution No. 733, a
Resolution of the board of Commissioners of Upper Allen Township,
Cumberland County, Pennsylvania, setting forth requirements for payments
of benefits on behalf of commissioners, on its first and final reading.
SECONDED by Commissioner Anderson.
ROLL CALL: Commissioner Allison voted no; President Lewis and
Commissioners Stathas and Anderson voted yes; Vice President
Frazer abstained, stating that he is not allowed to vote and that per
the Solicitor's guidance, he should abstain.
33. Upper Allen Township Resolution No. 733 enacted by the Board of Commissioners
on December 9, 2003, was adopted to address the issue of township
commissioners receiving insurance and /or other benefits of office.
a. This resolution states that commissioners shall not receive any township
provided benefit without the approval of a majority of the board of
commissioners.
b.
The township adopted resolution number 733 during their December 9,
2003, meeting, which addressed the payment of benefits on behalf of
commissioners.
b. Resolution 733 specifically reads as follows:
"WHEREAS, provisions of the First Class Township Code authorize
townships to expend funds for stated purposes, including, specifically, in
Section 1802 (63), which authorizes payment of insurance benefits for
employees and commissioners; and
WHEREAS, the Commissioners of the Township desire to establish by
resolution policies for the payment of benefits and other prerequisites to and
on account of Commissioners,
NOW, THEREFORE, be it RESOLVED, that no individual members of the
Board of Commissioners shall have the Township provide any benefit,
payment or other perquisite for himself or herself without the majority
approval of the Board of Commissioners; and
FURTHER RESOLVED, that all resolutions or parts of resolutions in conflict
therewith are hereby repelled [sic].
Approved by action of the Board of Commissioners of Upper Allen Township
at a duly convened meeting held on this 9 day of December 2003.
Frazer, 03 -037
Page 9
34. Frazer, in his official capacity as an Upper Allen Township Commissioner annually
filed Statements of Financial Interests with the township for the 1998 through 2002
calendar years.
a. Frazer was annually provided with blank Statement of Financial Interests
forms by the township administration for completion.
b. Blank Statement of Financial Interests forms include an instruction page
detailing information required to be included on the form.
c. Block 10 contained the following instructions:
Direct or Indirect Sources of Income: This block contains the
name and address of each source of income of $1,300 or more
of gross income. List the name and address of all employers
(including governmental bodies). Also, include the source and
address, not the dollar amount, of any payment, fee, salary,
expense, allowance, forbearance, forgiveness, interest
income, dividend, royalty, rental income, capital gain, reward,
severance payment, prize winning, and tax exempt income.
DO NOT INCLUDE: gifts; governmentally mandated
payments; or retirement, pension or annuity payments funded
totally by contributions of the person filing this form. If you did
not receive any reportable income then check "NONE."
35. Frazer interpreted the instructions as asking for income from current employers at
the time the Statement of Financial Interests was filed. Consequently, Frazer
inadvertently did not list income received from the Harrisburg Area Community
College on his Statement of Financial Interests form for calendar year 2000.
a. Frazer was employed by HACC full -time until August 31, 2000.
b. Frazer received income from HACC in excess of $1,300 during 2000.
c. Frazer's salary at HACC for the 1999 -2000 school year was $63,950.
d. Frazer's salary at HACC for the 2000 -2001 school year was $68,112.
36. Frazer only listed income from his full -time employer, he inadvertently did not list
income received from Upper Allen Township on his Statement of Financial Interests
form for calendar year 2001.
a. Frazer received income totaling $2,600 from the township during 2001 when
he filed deficient Statements of Financial Interests.
37. Frazer only listed income from his current full -time employer, he inadvertently did
not list the Eastern Building Materials Dealers Association on his Statement of
Financial Interests form for calendar year 2001.
a. Frazer was employed there full -time through March 2001.
b. Frazer received compensation in excess of $1,300 from this employer during
calendar year 2001.
c. Frazer received an annual salary of approximately $63,000 from this
employer.
Frazer, 03 -037
Page 10
III. DISCUSSION:
Since January 3, 2000, Respondent David Frazer (also referred to herein as
"Respondent" or "Frazer ") has been a public official /public employee subject to the
provisions of the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65
Pa.C.S. § 1101 et seq., which Act is referred to herein as the "Ethics Act."
The allegations are that Frazer, as a Commissioner for Upper Allen Township,
Cumberland County, violated Sections 1103(a) and 1105(b)(5) of the Ethics Act when he:
(1) used the authority of his office for a private pecuniary gain by completing healthcare
benefits application(s) and then directing Township employees to process the
application(s) so that he and his immediate family could receive health benefits at
Township expense without approval of the Board of Commissioners; (2) participated in
actions of the Board to approve payments for health benefits; and (3) failed to disclose all
sources of income in excess of $1,300 annually on Statement of Financial Interests forms
filed for calendar years 2000 and 2001.
Section 1103(a) of the Ethics Act provides as follows:
§ 1103. Restricted activities
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict of
interest.
65 Pa.C.S. § 1103(a).
The following terms pertaining to conflicts of interest are defined as follows:
§ 1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate family
or a business with which he or a member of his immediate
family is associated. The term does not include an action
having a de minimis economic impact or which affects to the
same degree a class consisting of the general public or a
subclass consisting of an industry, occupation or other group
which includes the public official or public employee, a
member of his immediate family or a business with which he or
a member of his immediate family is associated.
"Authority of office or employment." The actual
power provided by law, the exercise of which is necessary to
the performance of duties and responsibilities unique to a
particular public office or position of public employment.
"Immediate family." A parent, spouse, child, brother
or sister.
65 Pa.C.S. § 1102.
Section 1105(b)(5) of the Ethics Act provides:
§ 1105. Statement of financial interests
Frazer, 03 -037
Page 11
(b) Required information. - -The statement shall
include the following information for the prior calendar year
with regard to the person required to file the statement:
(5) The name and address of any direct or
indirect source of income totaling in the aggregate
$1,300 or more. However, this provision shall not be
construed to require the divulgence of confidential
information protected by statute or existing professional
codes of ethics or common law privileges.
65 Pa.C.S. §1105(b)(5).
Pursuant to Section 1103(a) of the Ethics Act quoted above, a public official /public
employee is prohibited from engaging in conduct that constitutes a conflict of interest.
Section 1103(a) of the Ethics Act prohibits a public official /public employee from using the
authority of public office /employment or confidential information received by holding such a
public position for the private pecuniary benefit of the public official /public employee
himself, any member of his immediate family, or a business with which he or a member of
his immediate family is associated.
Section 1105(b)(5) of the Ethics Act, pertaining to Statements of Financial Interests,
requires the filer to list the name and address of any direct or indirect source of income
totaling in the aggregate $1,300 or more.
As noted above, the parties have submitted a Consent Agreement and Stipulation of
Findings. The parties' Stipulated Findings are reproduced above as the Findings of this
Commission. We shall now summarize the material facts as contained therein.
Respondent Frazer has served as an Upper Allen Township ( "Township ")
Commissioner since January 3, 2000.
The Township offers health, vision and dental coverage to Township employees at
Township expense. However, prior to December 2003, there was no Township Resolution
addressing whether Township commissioners could receive Township insurance coverage
at Township expense. In January 2000, when Frazer became a Township Commissioner,
no Township commissioners participated in the Township's insurance plans.
Professionally, Frazer is a retired Air Force Officer. He was employed by the
Township as assistant manager and manager from 1996 to 1998. Commencing March 30,
1998, he was employed as the Executive Director of the Harrisburg Area Community
College Public Safety Center. In August 2000 Frazer was in the process of changing
employment, and he wanted to secure healthcare coverage for himself and his family.
On or about August 22, 2000, Frazer discussed with Township Manager Louis
Fazekas securing coverage for himself and his family under the Township's health, vision
and dental insurance plans (also collectively referred to herein as "health care plans" or
"health insurance plans "). Frazer asked Fazekas to determine whether it was permissible
for him to participate in the Township's health care plans at Township expense. Fazekas
determined that it was permissible; however, at that time, neither Fazekas nor Frazer
contacted the Township solicitor for advice on the matter.
On August 22, 2000, Frazer completed applications for Township - provided health,
vision and dental insurance coverages as detailed in Findings 8 and 11 -12. Frazer
returned his applications directly to the Township's bookkeeper, and he was added to the
Township health insurance plans as a result of his submission of the applications. The
Township Board of Commissioners did not take any action in August 2000 authorizing
Frazer to participate in the township's health insurance plans. Neither Frazer nor Fazekas
Frazer, 03 -037
Page 12
was aware that Board action was required.
Frazer and members of his immediate family participated in the Township health,
dental and vision plans from September 1, 2000, until September 1, 2001. During that
time period, there were other sources of insurance available to Frazer. At least one other
source required co -pays for health, dental and vision coverage. Frazer did not pay co-
pays for the Township benefits.
Between September 2000 and December 2001, the Township paid $11,110.96 for
insurance benefits for Frazer. From January 1, 2001, through August 31, 2001, these
benefits totaled $5,741.95.
In 2000 and 2001, Township Solicitor William Miller issued a total of three opinion
letters relating specifically to Frazer's receipt of Township - provided insurance benefits.
In correspondence dated October 10, 2000, Solicitor Miller stated, the
commissioners may participate in Township's health insurance plans at Township
expense." The letter suggested that the adoption of an authorizing ordinance would be the
most prudent course of action for the Township to take but did not give an opinion that
such action would be necessary.
On December 12, 2000, Solicitor Miller reiterated his previous advice to the Board
of Commissioners on the health insurance issue.
Subsequently, a March 9, 2001, Township audit report included the following
reference to a commissioner's receipt of Township -paid health benefits:
During our audit of payroll and employee benefits, we found
that one new Township employee nor his wage rate were not
approved in the board minutes or included on the approved
2000 salary schedule. The Township also paid health
insurance for a commissioner for the first time, however, the
township has no written policy regarding the payment of health
insurance for commissioners nor was there any formal
approval in the board minutes. These types of personnel
maters [sic] have historically been approved by the board and
included in the board minutes. We would recommend that
these specific personnel matters be considered for approval in
the board minutes for 2001, and made retroactive to the
payment starting dates in 2000.
Finding 28.
On July 9, 2001, Solicitor Miller provided a third opinion letter in which he informed
the Board:
We had previously advised the Board of our position on
this issue by letter dated 12 December 2000, a copy of which
is enclosed. It is our recommendation that the Board of
Commissioners adopt an appropriate resolution in order to
continue making payments for health insurance for
commissioners. In the event a resolution is not adopted, then
payments for Commissioner's health insurance must terminate.
In light of the auditors' comments, we believe it is not prudent
to make any such payments unless there is authority on the
record to do so. Accordingly, enclosed is a draft resolution
which could be adopted by the Board which would permit the
township to provide health insurance benefits to the
Frazer, 03 -037
Page 13
commissioners.
Finding 23. The Board of Commissioners took no action on Solicitor Miller's recommendation.
Frazer discontinued receipt of Township -paid health insurance benefits as of
August 31, 2001, and declined to continue the benefits at his own expense.
Nearly two years later, on June 19, 2003, the Township Board of Commissioners
directed the proper township officials" to provide the Board members with information
relating to the issuance of health benefits to a commissioner. Respondent voted in favor of
the motion.
On July 9, 2003, the Board discussed Frazer's receipt of Township -paid medical
coverage, but no action was taken by the Board to approve the benefits.
Frazer submitted a memo dated July 16, 2003, outlining his version of how he came
to receive Township -paid health benefits. The memo is detailed at Finding 31.
On December 9, 2003, the Township Board of Commissioners adopted for the first
time a resolution, Resolution 733, addressing payment of Township insurance coverage as
to Township commissioners. Resolution 733, quoted at Finding 33b, states that
commissioners shall not receive any Township - provided benefit without the approval of a
majority of the Board of Commissioners. Frazer abstained from the vote on Resolution
733, stating that he was not allowed to vote and that per the Solicitor's guidance, he
should abstain.
Frazer filed Statements of Financial Interests with the Township for the 1998
through 2002 calendar years. Frazer erroneously interpreted the instructions for Block 10
of the form (pertaining to disclosure of direct or indirect sources of income) as seeking
disclosure of income from employers who employed him at the time of filing rather than
during the applicable calendar year. Consequently, Frazer inadvertently did not list
income in excess of $1,300 received from the Harrisburg Area Community College in 2000
on his Statement of Financial Interests form for calendar year 2000.
Frazer inadvertently did not list another employer, the Eastern Building Materials
Dealers Association on his Statement of Financial Interests form for calendar year 2001.
Frazer received compensation in excess of $1,300 from this employer in 2001.
Additionally, Frazer inadvertently did not list income in excess of $1,300 received
from the Township in 2001 on his Statement of Financial Interests form for calendar year
2001.
Having highlighted the Stipulated Findings and issues before us, we shall now apply
the Ethics Act to determine the proper disposition of this case.
The parties' Consent Agreement sets forth a proposed resolution of the allegations,
as follows:
"3.
The Investigative Division will recommend the following in
relation to the above allegations:
a. That an unintentional violation of Section
1103(a) of the Ethics Act occurred when David
Frazer received health insurance benefits at
township expense without prior formal Township
Board of Commissioners' approval because Mr.
Frazer reasonably believed that such approval
was not necessary. Mr. Frazer acted in good
Frazer, 03 -037
Page 14
faith reliance on the township solicitor's written,
non - confidential opinion regarding health
insurance benefits for township commissioners.
b. That unintentional violations of Section
1105(b)(5) occurred when David Frazer
inadvertently disclosed his then current
employer, rather than listing former employers
as sources of income in excess of $1,300 on
Statements of Financial Interests filed for the
2000 and 2001 calendar years.
4. Frazer agrees to make payment in the amount of $5,741.95 as
full and complete settlement of this matter. Said amount to be
payable to Upper Allen Township and forwarded to the
Pennsylvania State Ethics Commission within thirty (30) days
of the issuance of the final adjudication in this matter.
5. The Investigative Division will recommend that the State Ethics
Commission take no further action in this matter; that no law
enforcement or other authority take action in this matter.
Such, however, does not prohibit the Commission from
initiating appropriate enforcement actions in the event of
Respondent's failure to comply with this agreement or the
Commission's order or the Commission cooperating with any
other authority who may so choose to review this matter
further."
Consent Agreement, paragraphs 3 -5.
In considering the Consent Agreement, it is clear that the elements for the
recommended violation of Section 1103(a) have been established. Frazer used the
authority of his public office as Township Commissioner by: (1) discussing with Township
Manager Louis Fazekas his desire to secure coverage for himself and his family under the
Township's health, vision and dental insurance plans; (2) asking Fazekas to determine
whether it was permissible for him to participate in the Township's health care plans at
Township expense; and (3) completing and submitting insurance applications directly to
the Township's bookkeeper so that he and his family would be added to the Township's
health insurance plans. But for his position as a Township Commissioner, Frazer would
not have been able to accomplish being added to the Township health insurance plans.
Such actions resulted in a private pecuniary benefit to Frazer and his immediate family
members, consisting of unauthorized health insurance benefits at Township expense.
Intent is not a requisite element for a violation of Section 1103(a) of the Ethics Act.
See, e.g., Yocabet v. State Ethics Commission, 531 A.2d 536 (Pa. Cmwlth. 1987).
Nevertheless, we find that the aforesaid violation was unintentional. Based upon the facts
as stipulated by the parties, it would appear that Frazer reasonably believed that he was
entitled to participate in the Township's health insurance plans. The Township Manager
indicated that such would be permissible, and subsequently, the Township solicitor issued
opinion letters that were consistent with that conclusion.
It was the March 9, 2001, audit report that brought to light the necessity for formal
action by the Board of Commissioners to authorize Township -paid health benefits for
commissioners.
Despite Frazer's lack of intent to violate the Ethics Act, Frazer did in fact use the
authority of his public office for the private pecuniary benefit of himself and his immediate
family members, necessitating our conclusion that an unintentional violation of Section
Frazer, 03 -037
Page 15
1103(a) of the Ethics Act occurred.
Therefore, we agree with the parties that an unintentional violation of Section
1103(a) of the Ethics Act occurred when Respondent Frazer received health insurance
benefits at Township expense without prior formal Township Board of Commissioners'
approval because Frazer reasonably believed that such approval was not necessary.
Frazer acted in good faith reliance on the Township solicitor's written, non - confidential
opinion regarding health insurance benefits for Township commissioners.
As for the allegation that Frazer violated Section 1103(a) of the Ethics Act when he
participated in actions of the Township Board of Commissioners to approve payments for
health benefits, it would appear from the Consent Agreement that the Investigative Division
has exercised its prosecutorial discretion to not further pursue that particular allegation.
Therefore, we shall treat it as a non pros.
Turning to the portion of the allegations pertaining to Respondent's Statements of
Financial Interests, based upon the Stipulated Findings it is clear that Frazer erroneously
interpreted the instructions for Block 10 of the Statement of Financial Interests form as
seeking disclosure of income from employers who employed him at the time of filing rather
than during the applicable calendar year. Therefore, we shall accept the parties'
recommendation that unintentional violations of Section 1105(b)(5) occurred when
Respondent Frazer inadvertently disclosed his then current employer, rather than listing
former employers as sources of income in excess of $1,300 on Statements of Financial
Interests filed for the 2000 and 2001 calendar years.
In settlement of this matter, Frazer has agreed to make payment in the amount of
$5,741.95 to Upper Allen Township. Such amount is $5,369.01 less than the total amount
($11,110.96) that the Township paid for insurance benefits for Frazer during the time
period under review, but both parties have agreed to that amount in the context of a
settlement.
We determine that the Consent Agreement submitted by the parties sets forth the
proper disposition for this case, based upon our review as reflected in the above analysis
and the totality of the facts and circumstances. Accordingly, Frazer is directed to make
payment in the amount of $5741.95 to Upper Allen Township through this Commission by
no later than the thirtieth (30 ) day after the mailing date of this Order.
If Frazer has not already done so, he is directed to file, within 30 days of the date of
mailing of this Order, amended Statements of Financial Interests for calendar years 2000
and 2001 with the Township, providing complete disclosure as required by Section 1105 of
the Ethics Act and this Order, and specifically with regard to sources of income. The
original of each such amended Statement of Financial Interests form is to be filed with the
Township, with one copy sent to the Administrative Division of this Commission for
compliance verification purposes.
As per the Consent Agreement, this case will not be referred to any law
enforcement authorities, and compliance with the foregoing will result in the closing of this
case with no further action by this Commission. Noncompliance will result in the institution
of an order enforcement action.
IV. CONCLUSIONS OF LAW:
1. In his capacity as a Commissioner for Upper Allen Township ( "Township "), David
Frazer ( "Frazer ") has been a public official subject to the provisions of the Ethics
Act since January 3, 2000.
2. Frazer unintentionally violated Section 1103(a) of the Ethics Act when he received
health insurance benefits at Township expense without prior formal Township Board
Frazer, 03 -037
Page 16
of Commissioners' approval because he reasonably believed that such approval
was not necessary. Frazer acted in good faith reliance on the Township solicitor's
written, non - confidential opinion regarding health insurance benefits for Township
commissioners.
3. Unintentional violations of Section 1105(b)(5) of the Ethics Act occurred when
Frazer inadvertently disclosed his then current employer, rather than listing former
employers as sources of income in excess of $1,300 on Statements of Financial
Interests filed for the 2000 and 2001 calendar years.
In Re: David Frazer
ORDER NO. 1345
File Docket: 03 -037
Date Decided: 9/20/04
Date Mailed: 10/1/04
1 David Frazer ( "Frazer "), a public official in his capacity as a Commissioner for
Upper Allen Township ( "Township "), unintentionally violated Section 1103(a) of the
Ethics Act when he received health insurance benefits at Township expense without
prior formal Township Board of Commissioners' approval because he reasonably
believed that such approval was not necessary.
2. Unintentional violations of Section 1105(b)(5) of the Ethics Act occurred when
Frazer inadvertently disclosed his then current employer, rather than listing former
employers as sources of income in excess of $1,300 on Statements of Financial
Interests filed for the 2000 and 2001 calendar years.
3. If Frazer has not already done so, he is directed to file, within 30 days of the date of
mailing of this Order, amended Statements of Financial Interests for calendar years
2000 and 2001 with the Township, providing complete disclosure as required by
Section 1105 of the Ethics Act and this Order, and specifically with regard to
sources of income. The original of each such amended Statement of Financial
Interests form is to be filed with the Township, with one copy sent to the
Administrative Division of this Commission for compliance verification purposes.
4. Per the Consent Agreement of the parties, Frazer is directed to make payment in
the amount of $5,741.95 to Upper Allen Township through this Commission by no
later than the thirtieth (30 day after the mailing date of this Order.
5. Compliance with paragraphs 3 and 4 above will result in the closing of this case
with no further action by this Commission. Non - compliance will result in the
institution of an order enforcement action.
BY THE COMMISSION,
Louis W. Fryman, Chair