HomeMy WebLinkAbout1432 KwitowskiIn Re: Casimir Kwitowski,
Respondent
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
Nicholas A. Colafella
06 -011
Order No. 1432
3/27/07
4/11/07
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 ( "Ethics Act "), 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 allegations. 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 requested. A
Stipulation of Findings and a Consent Agreement waiving an evidentiary hearing were
subsequently submitted by the parties to the Commission for consideration. The
Stipulation of Findings is quoted as the Findings in this Order. The Consent Agreement
has been approved.
This adjudication of the State Ethics Commission is issued under the Ethics Act 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 the Ethics Act. Any
person who violates such confidentiality commits a misdemeanor and, upon conviction,
may be 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.
Kwitowski, 06 -011
Page 2
I. ALLEGATION:
That Casimir Kwitowski, a private fsicl official /public employee in his capacity as
Controller for the City of Erie, violated Section 1103(a) provision of the State Ethics Act
(Act 93 of 1998), 65 Pa.C.S. §1103(a) when he used the authority of his office for a private
pecuniary gain to increase his compensation as Controller by authorizing his enrollment in
a city 401A Discretionary Pension Plan which increased his salary during his term in office.
II. FINDINGS:
1. Casimir Kwitowski has served as the elected Controller for the City of Erie since
January 8, 2002.
2. The Controller is an elected official serving the City of Erie which operates under
the Third Class City Code and the Optional Charter Law.
3. The Controller's salary is currently set at $38,000.00 per year.
a. The compensation was established by Ordinance # 49 -1996, effective
January 1998.
b. By law, compensation for the elected positions cannot be increased during
an incumbent's term of office.
4. It has been a long standing practice in the City of Erie for all elected officials,
including the City Controller to be eligible to receive City sponsored health benefits,
including medical, dental, and vision; and be eligible to participate in the City's
Officers and Employees Pension Plan.
a. The benefits are afforded to all full -time elected positions in Erie City
Government.
1. The eligibility existed prior to Kwitowski's service as Controller.
b. Full -time elected positions include the Controller, Mayor and Treasurer.
5. The City's Officers and Employees Pension Plan is a Defined Benefit Plan, which
provides that:
All officers and employees of the City of Erie, other than firemen and
policemen, are participants in the plan from the first day of their employment.
Officers and employees of the City of Erie may not participate in the Plan if
they were first hired, newly elected or first appointed to the service of the
City on or after June 26, 1992 on less than a full -time basis. All elected
officers of the City other than members of City Council are considered to be
full -time employees. Members of City Council are part -time employees."
a. Officer is defined as a person elected or appointed to City service.
b. City and State contributions to the plan are based on the number of
participating employees, and are required to maintain the solvency of the
plan.
c. All officers and employees of the City covered by the Social Security Act and
its Amendments, and participating in the Plan, pay an amount equal to 31/2%
of the monthly compensation on which social security allowances are
Kwitowski, 06 -011
Page 3
payable.
6. Since 2000 the City has offered a Deferred Compensation Plan under both §401(a)
and §457(b) of the Internal Revenue Code to union and management employees.
7 On September 27, 2000, Erie City Council unanimously voted to authorize a
Deferred Compensation Plan for AFSCME, Teamster, Non - Bargaining and
Management Employees in accordance with Sections 401(a) - Discretionary
Matching Plan, and 457(b) - Municipal Deferred Compensation, of the Internal
Revenue Code.
a. The resolution was submitted to council by Finance Director Charles Herron.
b. The plan was initiated as a result of collective bargaining with the AFSCME
and Teamster Unions, earlier in the year.
1. The plan was required to be implemented by October 1, 2000,
pursuant to the union contracts.
c. The police and firefighters unions subsequently negotiated the matching
plan.
d. Currently all City of Erie employees are permitted to participate in the 401(a)
Plan.
8. During the same September 27, 2000, meeting, Council authorized City Officials to
enter into an agreement with American General Fund Group for the Administration
of the 401(a) Plan.
a. The plan was to become effective on 11/15/00.
b. VALIC Retirement Services Company, a subsidiary company of the
American General Fund Group, was awarded a five year exclusive contract.
1. AIG is the parent company of American General Fund Group.
9. City officials assigned to implement the plan with VALIC included Finance Director
Charles Herron, and Assistant Finance Director James Weigle.
a. The VALIC representative was Patrick Geary.
1. Geary had been involved with the City of Erie Retirement /Investment
Plans for approximately fourteen years.
10. One of the initial steps taken in setting up the 401(a) Plan with the City of Erie, was
identified as VALIC Prototype Plan Checklist.
a. The checklist was completed on or about October 18, 2000.
b. The initial checklist included Eligible Participants as: AFSCME, Teamsters,
Non - Bargaining, elected officials and manager.
c. The checklist was prepared by Director of Administration and Finance
Charles Herron, and Assistant Finance Director James Weigle.
11. Weigle, Herron, and Geary concluded that the 401(a) Plan was a benefit, not
compensation, and determined that full -time elected officials would be eligible to
Kwitowski, 06 -011
Page 4
participate.
a. The consensus was based on the City's matching funds not being taxed until
they were withdrawn, and therefore not reflected as income on W -2 Wage and
Tax Statements.
b. Consideration was also given to the past practice that full -time elected
officials had, in the past, received the same benefits awarded to
management employees.
12. The Prototype Plan Checklist developed by Herron, Geary, and Weigle included
elected officials as part of the eligible group of participants.
a. When the information from the Prototype Plan Checklist was transferred onto
another checklist, the reference to elected officials was omitted.
b. The omission of elected official from the Prototype checklist went unnoticed
until 2005 when discovered by the City Solicitor.
c. It was the intent of the committee to include elected official[s] as eligible
participants.
1. The committee was comprised of representatives from the AFSCME
and Teamsters unions, and James Weigle.
2. The committee was responsible for: reviewing the proposals;
interviewing the representatives and sitting in on their presentations;
reviewing the funds of the companies; and choosing one company to
provide the plans.
13. The Plan Document approved on September 27, 2000, defined eligibility as any
employee of management, white - collar, AFSCME, Teamsters, Firefighters and
Police employees.
a. Elected officials were not named in the Plan documents as eligible to
participate.
b. The plan also specifically listed exclusions including (in part), employees
who are not classified as management, white - collar, AFSCME, Teamsters,
firefighters, or police.
1. Elected officials were not specifically listed on the exclusion list.
c. Neither "Management" nor "white- collar" employees were defined in the plan.
1. The City was charged with establishing the parameters for eligible
participants.
d. The city officials (Herron and Weigle) intended for elected officials to be
included in the plan.
14. The 401(a) Plan provided that the City of Erie would match $.50 of each dollar the
Employee deferred into a 457(b) account, up to 4% of the Employee's monthly
compensation.
a. Participation in the 457(b) plan was a requirement of enrollment in the
401(a) plan.
Kwitowski, 06 -011
Page 5
b. A participant became fully vested immediately upon entry into the Plan.
c. Participation was permitted on the date of employment.
15. Section 4.1 of the Plan Document explains the formula for determining the employer
contribution.
a. Each Plan Year, the employer will contribute to the Plan, on behalf of each
Participant who is eligible to share in matching contributions for the Plan
Year.
b. A matching contribution equal to 50% of each participant's deferred
compensation in the Employer's 457 Plan, shall be deemed an employer
non - elective contribution.
c. The Employer shall have discretion to vary the percentage from Plan Year to
Plan Year, except, in applying the matching percentage.
d. Only salary reductions up to 4% of annual compensation shall be
considered.
16. The Original Service Provider Agreements for the 401(a) and 457(b) Plans with
VALIC were executed on 10/16/00, by City of Erie Mayor Joyce Savocchio and
Controller Brenda Pundt.
a. On the same date, a Custodial Account Agreement for the 457(b) Plan, and
a Trust Services Agreement for the 401(a) Plan were executed by Mayor
Savocchio and Controller Pundt.
17. Three amendments were made to the Plan Document, between October 2000 and
April 2005, but none referenced elected officials as eligible participants.
a. An amendment to the City of Erie 401(a) Discretionary Matching Plan was
executed on February 27, 2002.
1. The Amendment was executed on behalf of the City of Erie by the
Mayor and Kwitowski.
2. The Amendment was adopted to reflect certain provisions of the
Economic Growth and Tax Relief Reconciliation Act of 2001
(EGTRRA).
b. An Amendment to the City of Erie 401(a) Discretionary Matching Plan was
executed on December 30, 2003.
1. This was to include Minimum Distribution Requirements effective
with the beginning of the 2003 calendar year.
c. An Amendment to the 401(a) Plan, effective 01/01/04, was initiated on behalf
of the employer (City of Erie) to include provisions applicable to (and to
exclude provisions that are not applicable to) governmental plans (as that
term is defined in Section 414(d) of the Code).
1. This was a restatement of the Plan issued as a result of pension
reform (EGTRRA).
Kwitowski, 06 -011
Page 6
18. In 2002, Nationwide Retirement Solutions was administering one of the City's
457(b) Plan [sic].
a. City Council on February 27, 2002, approved Nationwide to provide a 401(a)
savings plan (Employer Matching Deferred Compensation Program).
b. The 401(a) plan with Nationwide intended to include elected officials.
19. The Adoption Agreement between Nationwide Retirement Solutions, Inc., and the
City to provide a governmental deferred compensation matching plan and trust
authorized the inclusion of elected participants.
a. The motion to authorize the Agreement specifically listed elected officials as
eligible participants.
1. Also listed as eligible were: management employees, non - bargaining
employees, AFSCME represented employees, Teamster represented
employees, and the F.O.P. represented employees.
b. The plan was to have become effective 01/01/02.
20. VALIC challenged the City's Agreement with Nationwide based on the five year
exclusive contact it had with the City to administer the 401(a) plan.
a. The Nationwide 401(a) agreement was terminated by the City before
implementation.
21. The VALIC 401(a) Discretionary Matching Plan Document provided, in part, the
following information:
a. The City was charged with the general administration of the Plan,
including, but not limited to:
1. The discretion to determine all questions relating to the
eligibility of employees to participate or remain a participant
and to receive benefits under the Plan;
2. To compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which participant[s] are
entitled; and,
3. To assist any participant regarding the participant's rights,
benefits or elections available under the Plan.
b. The administrator ( VALIC) determined the eligibility of each employee
for participation in the Plan based upon information furnished by the
employer.
c. If a participant became an ineligible employee, the former participant
would continue to vest in the Plan for each year of service completed
while a non - eligible Employee, until such time as the participant's
account was forfeited or distributed pursuant to the terms of the Plan.
Additionally, the former participant's interest in the Plan continues to
share in the earnings of the Trust Fund.
d. If a person that should not have been included as a participant in the
Plan was included, and discovery was not made until after a
Kwitowski, 06 -011
Page 7
contribution for the year had been made and allocated, the employer
was entitled to recover the contribution made with respect to the
ineligible person provided the error is discovered within 12 months of
the date on which it was made. Otherwise, the amount contributed
with respect to the ineligible person shall constitute Forfeiture for the
Plan Year in which the discovery is made.
e. The administrator was to establish and maintain an account in the
name of each participant to which the administrator shall credit as of
each Anniversary Date, or other Valuation Date, all amounts allocated
to each Participant.
f. If a participant terminated employment for reasons other than death,
total and permanent disability or retirement, the participant was
eligible to benefits as provided in the plan.
1. Distribution of the funds due to a terminated participant would
be made on the occurrence of an event which would result in
the distribution had the terminated participant remained in the
employ of the employer.
2. At the participant's request, the administrator may direct that
the entire vested portion of the terminated participant's account
be paid to the participant.
22. The Plan Document also contains provisions for Participants to apply for an
advance distribution of funds under certain conditions.
a. Eligible participants could transfer or roll over existing qualified
retirement plans or traditional IRA accounts into the City's 401(a)
Plan.
1. In- service withdrawal of the participant's rollover contributions
from the 401(a) Plan may be permitted.
b. A participant may receive an advance distribution up to the lesser of
100% of the participant's account value, or the amount necessary to
satisfy the immediate and heavy financial need of the participant.
1. Heavy financial need is defined as: medical expenses; costs of
the purchase of a principal residence for the participant;
funeral expenses for a family member; tuition; payments to
prevent eviction from the participant's primary residence or
foreclosure on the mortgage on that residence; and any other
immediate and financial hardship as determined by the
administrator.
c. The trustee has the discretion to make loans to participants and
beneficiaries under the following circumstances: [sic]
23. No withdrawals or hardship applications have been requested by elected officials
who have participated in the 401(a) Plan.
24. Kwitowski enrolled in the plan by completing a 401(a) Enrollment Form on
December 10, 2002.
a. Kwitowski completed a 457(b) Enrollment Form at the same time.
Kwitowski, 06 -011
Page 8
b. The forms are also signed by VALIC Agent #3013.
c. Kwitowski obtained the forms from the City Benefits Coordinator.
1. The benefits coordinator provided the forms to Kwitowski assuming
that he was eligible to participate.
25. In or about April 2005 the Erie City Solicitor's office was conducting a review of the
City's pension plans.
a. The review confirmed Kwitowski's participation in both the 457(b) and 401(A)
plan.
b. The solicitor, Paul Curry, forwarded a letter dated April 1, 2005, to then
Mayor Filippi and Finance Director advising that a determination was made
by his office. Kwitowski was an ineligible participant in the 401(a) and
457(b) plans because it would result in the receipt of excess compensation
in violation of City Ordinance 121 -10 and Pennsylvania State Law.
c. Also on April 1, 2005, Curry sent a similar letter to Kwitowski advising that
Kwitowski's participation in the plans was illegal as a result of the excess
compensation he would receive as a result of his participation.
1. Curry requested that Kwitowski call his office to arrange for the
repayment of matches made by the City.
d. Curry sent notices similar to the April 1, 2005, letter to Kwitowski on
September 1, 2005, and November 10, 2005.
1. The 11 -10 -05 memorandum directed Kwitowski to contact Finance
Director Peterson by 11 -15 -05 for repayment of the funds by 11 -30-
05.
e. Kwitowski did not respond to any of Curry's correspondences.
26. Kwitowski's participation in the 401(a) plan was involuntarily terminated on April 1,
2005, by then Finance Director Gary Peterson, at the direction of then City Solicitor
Paul Curry.
27. While participating in the 457(b) plan Kwitowski deferred the maximum 4% of his
salary.
a. Kwitowski's deferred compensation contributions totaled $1,520 per year.
b. The City contributed 1/2 of $1,520, or $760.00 per year, into Kwitowski's
401(a) account.
28. During the time period that Kwitowski was participating in the City of Erie 401(a)
Matching Contribution Plan, the City contributed $1,651.59 on his behalf.
2003 $716.13* 01/01-12/31/03
2004 $760.08 01/01-12/31/04
2005 $175.38 01/01-04/01/05
* Enrollment in the Plan was not processed until after 01/01/03.
Kwitowski, 06 -011
Page 9
29. Two other elected officials have participated in the City of Erie 401(a) plan between
10/01/00 and 5/01/06.
a. The participation of Susan DiVecchio, elected Treasurer, was terminated on
04/01/05, around the same time that Kwitowski's participation was
terminated.
1. DiVecchio was an employee of the City prior to being appointed to fill
the vacated position of Treasurer in mid 2004.
2. DiVeccio was subsequently elected Treasurer.
b. Former Treasurer Ortenzia Keller participated until her term ended in
December 2003.
30. Kwitowski's predecessor as Controller and other elected officials including mayors
opted not to enroll in the deferred compensation plans.
31. In 2001 when former Treasurer Ortenzia Keller inquired about enrolling in the
deferred compensation programs, the appropriateness of elected officials'
participation was considered.
a. The matter was reviewed by Finance Director Herron, Assistant Director
Weigle, and VALIC representative Geary.
1. City Solicitor Karle was also consulted.
b. No legal precedent could be found prohibiting an elected official's
participation.
c. Herron and Weigle believed that the 401(a) Plan was a benefit since it was
voluntary.
d. Geary's opinion was that elected official[s] were entitled to participate
because the 401(a) Plan was not considered compensation under IRS tax
rules.
e. Elected officials in Erie had historically participated in all other benefit plans.
32. Based on the review done in 2001, Keller was authorized to participate in the
401(a) Plan.
33. As a past practice, elected officials had generally enjoyed the benefits afforded to
City management employees.
a. As a result, elected officials' participation in the 401(a) Plan was not
reviewed to specifically determine elected official eligibility.
1. The only review done was when Ortenzia Keller requested to
participate.
b. No review of Kwitowski's enrollment was done until 2005.
34. City contributions to the 401(a) plan on behalf of Kwitowski, Keller, and DiVecchio
are being held by AIG VALIC.
a. No funds have been withdrawn.
Kwitowski, 06 -011
Page 10
III. DISCUSSION:
Respondent Casimir Kwitowski (hereinafter also referred to as "Respondent,"
"Respondent Kwitowski," or "Kwitowski "), as Controller for the City of Erie ( "City ") since
January 8, 2002, is a public official subject to the provisions of the Public Official and
Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq.
The allegation is that Kwitowski violated Section 1103(a) of the Ethics Act when he,
as City Controller, used the authority of his office for a private pecuniary gain to increase
his compensation as Controller by authorizing his enrollment in a City 401A Discretionary
Pension Plan, which increased his salary during his term in office.
Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is
prohibited from engaging in conduct that constitutes a conflict of interest:
§ 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 term "conflict of interest" is defined in the Ethics Act 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.
65 Pa.C.S. § 1102.
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.
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 relevant facts as contained therein.
Respondent Kwitowski has served as the elected City Controller since January 8,
2002. Since 1998, the City Controller's salary has been set at $38,000 per year. By law,
the City Controller's compensation cannot be increased during an incumbent Controller's
Kwitowski, 06 -011
Page 11
term of office.
It has been a long standing practice for all full -time elected City officials, including
the City Controller, Mayor and Treasurer, to be eligible to participate in the City's various
health benefits and defined benefit pension plan.
On September 27, 2000, City Council voted to authorize a Deferred Compensation
Plan for AFSCME, Teamster, Non - Bargaining and Management Employees in accordance
with Internal Revenue Code Sections 401(a) (Discretionary Matching Plan) and 457(b)
(Municipal Deferred Compensation). The Plan Document approved by City Council on
September 27, 2000, did not specifically designate elected officials as either being eligible
to participate or excluded from participation in the Plan. Per the Plan Document, the City
was to determine all questions relating to the eligibility of employees to participate and to
receive benefits under the Plan.
VALIC Retirement Services Company, a subsidiary company of the American
General Fund Group, was awarded a five -year exclusive contract for the administration of
the 401(a) Plan. The parent company of American General Fund Group is AIG.
The City's Finance Director, Charles Herron ( "Herron "), and Assistant Finance
Director, James Weigle ( "Weigle "), were assigned to implement the Plan with VALIC.
Herron, Weigle, and VALIC representative Patrick Geary ( "Geary ") concluded that the
401(a) Plan was a benefit, not compensation. They also determined that full -time elected
officials would be eligible to participate in the Plan. The latter determination was
supported by past practice whereby full -time elected City officials had received the same
benefits awarded to management employees.
One of the initial steps in setting up the City's 401(a) Plan was the development of a
" VALIC Prototype Plan Checklist" by Herron, Weigle, and Geary. The checklist, which was
completed on or about October 18, 2000, included elected officials as eligible participants.
However, when the information from the Prototype Plan Checklist was transferred onto
another checklist, the reference to elected officials was omitted. The omission of elected
officials from the checklist went unnoticed until 2005, when it was discovered by the City
Solicitor.
Meanwhile, on February 27, 2002 —less than two years into the City's five -year
exclusive contract with VALIC for administration of the City's 401(a) Plan —City Council
approved an agreement with Nationwide Retirement Solutions, Inc., whereby Nationwide
would provide a 401(a) savings plan that would specifically include elected City officials as
eligible participants. The Nationwide 401(a) agreement was not implemented at the time,
as a result of a challenge by VALIC.
In December 2002 Kwitowski enrolled in the City's 401(a) Plan administered by
VALIC. Kwitowski's enrollment was accomplished by his completion /submission of a
401(a) Enrollment Form and a 457(b) Enrollment Form. (Participation in the 457(b) Plan
was a requirement of enrollment in the 401(a) Plan.) Kwitowski obtained the enrollment
forms from the City Benefits Coordinator. The City Benefits Coordinator assumed that
Kwitowski was eligible to participate.
No review of the appropriateness of Kwitowski's enrollment occurred until 2005. On
or about April 1, 2005, Kwitowski's participation in the City's 401(a) Plan was involuntarily
terminated at the direction of City Solicitor Paul Curry ( "Curry "), who concluded that
Kwitowski was an ineligible participant in the 401(a) and 457(b) Plans and that Kwitowski's
participation would result in the receipt of excess compensation.
During the time period that Kwitowski was participating in the City's 401(a) Plan, the
City contributed $1,651.59 to Kwitowski's 401(a) account.
Kwitowski, 06 -011
Page 12
Between October 1, 2000, and May 1, 2006, two other elected City officials
participated in the City's 401(a) Plan. Former Treasurer Ortenzia Keller ( "Keller") inquired
about enrolling in the deferred compensation programs in 2001. At that time, Herron,
Weigle, and Geary reviewed the appropriateness of participation by elected officials. Then
City Solicitor Karle was also consulted. Based upon the review in 2001, Keller was
authorized to participate in the 401(a) Plan. See, Fact Findings 31 -33. Keller participated
until her term ended in December 2003. The participation of current City Treasurer Susan
DiVecchio ( "DiVecchio ") was terminated on April 1, 2005.
City contributions to the 401(a) Plan on behalf of Kwitowski, Keller, and DiVecchio
are being held by AIG VALIC. No funds have been withdrawn.
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 allegation
as follows:
3. The Investigative Division will recommend the following in relation to
the above allegations:
a. That no violation of Section 1103(a) of the Public
Official and Employee Ethics Law, 65 Pa.C.S. §1103(a)
occurred when Kwitowski authorized his enrollment in a
city 401A Discretionary Pension Plan, based upon the
fact that there was no use of office when he was added
to the deferred compensation plan by city
administrators.
4. Kwitowski agrees to not participate in the deferred compensation
program until implementation of the agreement authorized by city
council on February 27, 2002.
5. Both the City and Kwitowski shall obtain a refund of their contributions
upon termination of his participation in the program. Nothing
contained in this agreement shall be construed to prohibit Kwitowski
from reinvesting his portion of the contributions returned to him in the
authorized deferred compensation plan when implemented.
6. The Investigative Division will recommend that no further action be
taken in this matter. The Commission also retains the right to initiate
appropriate enforcement actions in the event of Respondent's failure
to comply with this agreement. Nothing in this agreement shall
prohibit the Commission from cooperating with any authority who may
so choose to review this matter further.
Consent Agreement, at 1 -2.
In considering the Consent Agreement, we accept the recommendation of the
parties that no violation of Section 1103(a) of the Ethics Act occurred because the Fact
Findings do not establish the requisite element of a use of the authority of Kwitowski's
public office as City Controller relative to his enrollment in the City's 401(a) Plan. Although
Kwitowski submitted enrollment forms to be added to the Plan, the City Benefits
Coordinator simply assumed that Kwitowski was eligible to participate. Such assumption
was understandable in light of a prior review that had been conducted in 2001 as to the
participation of elected officials in the Plan.
Kwitowski, 06 -011
Page 13
Under the particular facts of this case, we hold that no violation of Section 1103(a)
of the Ethics Act occurred as to Kwitowski's alleged authorization of his enrollment in the
City's 401(a) Discretionary Pension Plan, based upon the fact that there was no use of
office by Kwitowski when he was added to the Plan by City administrators.
Kwitowski has agreed to not participate in the City's deferred compensation program
until implementation of the agreement that was authorized by City Council on February 27,
2002. See, Findings 18 -20. The parties have agreed that both the City and Kwitowski
shall obtain a refund of their contributions upon termination of his participation in the
program.
The parties have further agreed that nothing contained in the Consent Agreement
shall be construed to prohibit Kwitowski from reinvesting his portion of the contributions
returned to him in the authorized deferred compensation plan when implemented.
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, Kwitowski is directed to comply with the terms of the Consent
Agreement of the parties, including the term that he shall not participate in the City's
deferred compensation program until implementation of the agreement that was authorized
by City Council on February 27, 2002.
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. Respondent Casimir Kwitowski ( "Kwitowski "), as Controller for the City of Erie
( "City ") since January 8, 2002, is a public official subject to the provisions of the
Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq.
2. Kwitowski did not violate Section 1103(a) of the Ethics Act as to his alleged
authorization of his enrollment in the City's 401(a) Discretionary Pension Plan,
based upon the fact that there was no use of office by Kwitowski when he was
added to the Plan by City administrators.
In Re: Casimir Kwitowski,
Respondent
ORDER NO. 1432
File Docket: 06 -011
Date Decided: 3/27/07
Date Mailed: 4/11/07
1 Respondent Casimir Kwitowski ( "Kwitowski "), a public official in his capacity as
Controller for the City of Erie ( "City ") since January 8, 2002, did not violate Section
1103(a) of the Ethics Act as to his alleged authorization of his enrollment in the
City's 401(a) Discretionary Pension Plan, based upon the fact that there was no use
of office by Kwitowski when he was added to the Plan by City administrators.
2. Kwitowski is directed to comply with the terms of the Consent Agreement of the
parties, including the term that he shall not participate in the City's deferred
compensation program until implementation of the agreement that was authorized
by City Council on February 27, 2002.
a. Compliance with the foregoing will result in the closing of this case with no
further action by this Commission.
b. Non - compliance will result in the institution of an order enforcement action.
BY THE COMMISSION,
Louis W. Fryman, Chair